Deutsche Banc Alex. Brown Resumes Research Coverage of Several Semiconductor Stocks
Tuesday, February 29, 2000 09:34 AM Mail this article to a friend
NEW YORK, Feb. 29 /PRNewswire/ -- The following was issued today by Deutsche Banc Alex. Brown:
Deutsche Banc Alex. Brown's Erika Klauer yesterday expanded her research coverage of the semiconductor device stocks by resuming coverage of the shares of Altera Corp. (ALTR -- 72 5/16), Atmel Corporation (ATML -- 43 3/16) and Xilinx Inc. (XLNX -- 69 3/16) with an investment rating of STRONG BUY, while coverage of Micron Technology Inc. (MU -- 73 5/8) was resumed with a BUY investment rating. This action represents a change in analyst coverage on these stocks.
"After a disappointing three-year downturn, we are at the beginning of a substantial semiconductor industry up-cycle, in our view," said Klauer. "As the use of semiconductors is shifting from PC-centric products to Internet infrastructure and wireless communications such as cellular phones, the industry is enjoying a communications driven boom."
Klauer estimates the semiconductor industry will grow 32% worldwide in FY00 to $196 billion. This follows growth of 19% in 1999 and compares to the consensus forecast of 20% growth for FY00.
Klauer's positive investment thesis on the sector stems from the following key trends that she believes are having a favorable impact on the overall semiconductor industry.
(1) Demand by application remains strong across the board, in our opinion.
(2) We continue to believe that the consumer market should provide a
surprisingly strong source of demand for semiconductors.
(3) Supply is still limited.
(4) Delayed new fab construction should help keep incremental capacity to
a minimum.
"Looking at the key sources of demand for semiconductors, we believe the market is extremely healthy," said Klauer.
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