To all FLSH comrades, read this and be assured; read thru the end so you're sure to see the importance of flash memory:
<<Industry Analysis
Nov 12, 1999
Semiconductors: Handicapping Merrills Semiconductor Picks
Senior analyst: Chris Bulkey (11/12/99)
The outlook for the semiconductor industry continues to improve due in large part to a
shift from PC-centric demand to applications used in wireless communications and
Internet infrastructure settings.
Recent data from the Semiconductor Industry Association (SIA) confirms that industry
growth is accelerating and poised to remain strong for years to come.
Worldwide sales of semiconductors increased 24% in September, from a year ago, led
by communications and networking chips. In a recent press release, SIA President
George Scalise said demand was broad-based and that September sales were the
largest seen all year continuing a rebound from last year?s industry downturn. With
Japan and Asia reporting sales increases of 37% and 36% respectively, industry
momentum appears to be accelerating.
An important aspect to consider is that this upturn appears to be more well controlled
than previous expansions when chip-makers had a propensity for adding capacity too
rapidly, which then fueled volatile boom-bust cycles.
Semiconductor companies have also made a deliberate effort to lower cost structures
and have hopefully learned from past over-capacity mistakes. This fact has also led
many Street analysts to incorporate low margin assumptions into earnings projections
for many companies, which should lead to more earnings surprises in 2000; yet another
catalyst for semiconductor stocks.
Looking ahead, The SIA projects sales to rise 21% to $174 billion in 2000 versus a
projected 15% gain in 1999. Two areas that should outpace the industry are flash
memory and digital signal processors (DSPs), which are projected to grow 36% and
32%, respectively, in 2000. Flash memory chips, which retain information when power
supplies are turned off, are vital in mobile phones, digital cameras and mobile computing
devices. DSPs, which can be thought of as the central nervous system of a mobile
phone, also have a strong outlook. Add in continued strong demand from data
networking, PC and fiber optic markets and you have the landscape for a sustainable
industry upturn. >>
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