This is just like April of 1995. Everybody wants SRAM NOW. Cellular demand explosion has created a mini(???) shortage of SRAM and other products, Flash, etc.
Because of the terrible pricing of SRAM, most SRAM vendors except Cypress de-emphasized SRAM. It is a matter of time that all former SRAM players(IDTI,ALSC,ISSI,Winbond, etc) and big boys(MU, Samsung)to address the shortage and cause the glut again. Samsung has announced publicly that they will attempt to gain 10% of market share from current 7%. Meanwhile, enjoy the ride. My understanding is that Book to Bill ratio of SRAM is over 1.3. Cypress and other major U.S. SRAM supplier, IDTI is shipping everything they could make. SRAM users may be double and triple booking SRM to insure the supply of SRAM.
TJ Rodger has shown in 1995 that he is an extremely good at determining the valuation of HIS company. He sold his stock at price fairly close to the peak(above $50(pre split). Let's just hope that his recent stock sale is not indicative of the peak.
Observation in 1995.
As long as Book to Bill ratio is above 1.25 and beats the estimate of street, the stock will go up regardless of the price. When Book to bill is less than 1.2, watch out. It will lose $5 in a day and the stock will be less than 50% of the peak price. Learned a hard way in 1995.
$50 target. Hmmmm. I think it will be little difficult. Cypress simply do not have the fab capacity to grow that fast. And I think the external capacity will grow much faster than Cypress ability to add capacity. CY may use TSMC as a wafer foundry but other guys(ALSC,ISSI) are using them too. So, fabless guys(ALSC, ISSI) probably get their allocation before Cypress since they do more with TSMC.
Do your own DD and this is IMHO. |
