IDTI - an IC Play on Growth Markets Message Board

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Technology Stocks : IDTI - an IC Play on Growth Markets

IDTI 48.99

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Mar 29 5:00 PM EST

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To: musea who wrote (10329)	6/23/1999 10:59:00 PM
From: Jim Oravetz	Read Replies (1) of 11555

A related(Cypress) article from today's WSJ(Int)..Another specialized chip maker trying to mine Internet and telecommunications gold is Cypress Semiconductor. Cypress got slammed last quarter when a manufacturing snafu slashed shipments of SRAMs (static RAMs, or memory used in networking applications) while demand was heavy. "They shot their quarter, which put them in the dog house," says Dan K. Scovel, an analyst at Fahnestock & Co. But he thinks that's history. Why? SRAMs, which comprised 40 percent of Cypress's 1998 revenues of $487 million, are a good business these days. Worldwide SRAM revenues are projected to grow by 65% over the next three years, to $6.6 billion in 2002 from this year's $4.0 billion, according to Dataquest. "Their business is strong, pricing has become less aggressive and the company did a sound acquisition to double the size of their PC clock business," says Edelstone. Cypress recently bought IC Works, which makes chips for timing features in PCs and other products. (Chips for PC products account for another 30 percent of Cypress's sales.) At Monday's closing price of 16 7/8, Cypress set a new 52-week high -- although that's still well below its 1995 all-time high in the mid-20s. And it trades at reasonable P/Es of 29x 1999 estimated earnings of 58 cents a share and only 17x First Call's consensus 2000 earnings of 96 cents. That's a nice discount to Cypress's projected earnings growth rates of 60% in 1999 and 65% next year. +++ Perhaps this why IDT has run up recently. CY and IDT have always been closely compared since they both produced SRAM's. IDT is now moving to reduce its dependence on SRAM's, but it still makes up a significent portion of rev. Jim

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