We didn't even have to buy the CFO of Applied Micro Circuits ( AMCC) a beer.

Bill Bendush was more than graphic in describing the communications equipment spending clampdown that sucker-punched his upcoming first quarter results. Last week AMCC met Street fourth-quarter expectations, but warned that revenue would fall 42% in the first quarter to follow. This week he got to face the JPMorgan H&Q crowd. How bad is it, Bill?

It's really (insert your expletive here) bad. Let him count the ways:

The inventory buildup among AMCC's key communications customers has cut business to zero. Forget about order delays. "We don't have any backlog. How many more orders can they cancel?!" Bendush deadpanned about his empty nest. Bendush says business cut out halfway through the last quarter -- enough so that he's got his marketing team to go back to mid-1999 revenue levels, draw a straight line to the first-quarter forecast and calculate growth levels. The Street is going to have to acclimate itself to growth in the high teens vs. those spectacular high-30% performances from 2000.

This could take some getting used to.

And no, price pressure will have nothing to do with it. If only AMCC was that lucky. "To date I have not seen any pricing requests from customers, any pricing pressure. Maybe that's because they're not placing any orders," he said.

Enough inventory madness! When does he expect his customers to work through what they've got and buy products again? Four to six months, he says, using internal numbers put together six weeks ago. The trouble there is that in those six weeks, Bendush's gut tells him that number has stayed the same. "It feels to me like it's probably the same thing," he says. That's four to six months of inventory, starting now. "We're not making any breathing room." Many of those design wins from last year just may not get made, after all.

So how can this be the bottom? Bendush admits that AMCC's estimates that June will be the bottom are culled from nothing but anecdotes and the words of Street-doubted customers such as Nortel ( NT). "I believe June will be the bottom, but we're not expecting great things in September," he says.

In other words, he's got no visibility, which he translates as "another way of saying 'poor orders.'"

No second-half 2001 comeback here. It's time for that beer.

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