NEW YORK (MoneyView On-Line) -
Semiconductor stocks are "clearly" undervalued, according to Banc of America
Securities" Richard Whittington, who cited higher-than-anticipated unit growth, continuing
tight supplies and increasing chip demand by internet-related companies.
"We believe that even we have been underestimating 2001 revenue, margins and
earnings," Whittington said. "We will soon remedy this and move toward posting 2002
projections, which combined will clearly demonstrate how undervalued semiconductor
stocks now are."
Amongst semiconductor issues Whittington rates a "strong buy" are Advanced Micro
Devices Inc, Intel Corp, Micron Technology, National Semiconductor Corp and Texas
Instruments Inc.
"The inability of capital equipment manufacturers to support customer requirements will
extend tight supply-demand well into 2002 to 2003," he said, adding he believes that is
the "shortest" period in which new capacity can come on line.
"Significant" shortages in the electronic component segment should "intensify" over the
next year or two, he said, noting the equipment industry"s "failure to anticipate chip maker
needs."
Internet-related chip growth is seen shortly driving 50 pct of chip demand, he said -- a
view also expressed yesterday by Applied Materials Inc"s David Wang.
Existing capacity is insufficient to meet internet-related needs and the required
conversion from 0.25-micron-and-above capacity to 0.18 and below will take 3-5 years,
the analyst estimates.
He sees a "tight and even short" DRAM market for the next 18-24 months. AMD closed
down 3-11/16 at 56-3/4, Intel lost 1-9/16 to 62 and Micron Technology declined 3-15/16
to 76-1/2. National Semiconductor edged 3/4 higher to 36-1/16 and Texas Instruments
shed 1-3/16 to 59-3/8. " |
