Some recent GG posts of note from the GTR Forum.
Medved of Jolt appeared at both my first two Telecosm conferences. He persuaded me that Terabeam was possible, indeed inevitable. 4/27/00
Another British company, risky but rare, is Bookham (BKHM). I wrote about it after the 1999 Optical Fiber Conference in San Diego. 4/27/00
I haven't looked at Integrated Device Technologies (IDTI) for years. It began when John Carey spun out of AMD and has tried almost everything in its career--SRAMs, MIPS processors, and now communications chips. Well, maybe. They are not the first to make the turn. 4/28/00
IDTI is a solid twenty year old chip company, but it lacks any process edge (no silicon germanium or other fast chemistry) and it is late into communications devices. But I will check them out again if I have a chance (it takes time to figure out a company like this). 4/28/00
Nogging 9 question (GG thinks of nine companies that are hot in his mind at the time of the day. Not be used as a BUY recommendation)
? Begin with Avanex, because its on my mind. Add JDSU for your other components. Bring in Nortel to assemble them. Sign up National and Atmel to make your chips for the edge. Put in Mirror Image (XLA) to defy the shorts on storewidth. Take a shot of Procom after some DD. Add to Qualcomm and MFNX (Metromedia Fiber) when they are down. And keep some powder dry for Terabeam. How many is that?
On price and timing all the usual caveats and cautions apply. The noggin needs more sleep. And you will need some fiber for breakfast. Lucent and Corning are the usual suppliers. 4/28/00
Left off Global Crossing! Maybe a Freudian slip. But this selloff idea leaves me cold, and in the midst of the chill, I forget the huge value here. 4/28/00
Hey, I have to be careful. You have to be careful. I have not researched Procom closely. It was a noggin nine. That is a three AM mind dump that reflected my interest in finding another storewidth company. It may turn out that Network Appliance or several others are better vehicles. Moreover, the absence of Global Crossing and Globalstar bore absolutely no significance. That's the trouble with noggin nines. They become tens and elevens and thirties, as the paradigm spreads and my memory freshens. But it is a Forum tradition, and I will keep it up. 4/29/00
I discussed Bookham in depth a year ago. It is a disruptive outlier. The Nortel Air Fiber venture is no threat to Terabeam. 4/28/00
Bookham still has the problem of making inferior products more cheaply at a time of undershoot (in Clayton Christensen's terms), when the industry will pay premiums to JDSU to get superior performance, and still is unsatisfied. But if they can get substantial breakthroughs from cable companies, it would indicate serious progress. I need to investigate them again. 4/28/00
Yes, I have already answered this silly article, which previously appeared on The Street. The supposedly egregious 74000 percent is merely an effect of the incorporation of the Mirror Image startup in a shell with very little value. I have since discovered that Vik, a Norwegian who for some strange reason is loath to pay either US or Swedish taxes on his European XLA operations, has invested around $10 million in the company. So far this year, the Vik Brothers fund or whatever has conducted some complex paper transactions involving a tiny portion of total share value, that end up a wash. Mirror Image's revenues--as small as they were--exceeded Akamai's in early 1999. Today with the help of Exodus (and several others to come), it is making impressive progress. 4/29/00
Globalstar will climb a wall of worry directly into the troposphere. Low earth orbit may seem low to satellite engineers but it is high for investors who understand the lightspeed mandate. 4/30/00
I agree on Novell and I am continuing to study Network Appliance and its role in Internet growth. Procom is interesting because of the transistion underway in its strategy. If it succeeds, the results could resemble Atmel's. 4/30/00
Thanks for reminding me of Auspex. I did not know about the quantum dots, which suggests that I do not fully understand the company. 4/30/00
The next series of posts. Thread development is interesting so included.
GG or anyone, Can we expect a decade of chip growth or will the up cycle just last longer this go round? LSI Logic Chairman, Wilfred Corrigan was quoted as saying;
"Driven by the Internet, we expect a golden age of the semiconductor industry over the next ten years"
Internet connected devices, including PC's, mobile devices and cellular phones, could grow to between 700 million and 1 billion units by 2003 from some 200 million in 1999.
-Woodfish poster
According to the paradigm, the industry will shift to single chip systems moving steadily up spectrum which will reverse the trend toward ever sinking unit prices, which chiefly affects memories anyway. Up spectrum processing will entail use of exotic materials (silicon germanium, indium phosphide, gallium arsenide et al), new connectors (copper), new packaging for low power, analog and mixed signal devices, all of which will mean an increase in the price of chips and even perhaps of transistors. Single chip systems mean that each device will also contain more expensive intellectual property comprising more and more of the value of the overall system. 4/30/00
FYI; NTAP is swiching over to INTC product.
From; Semiconductor Equipment and Materials International
"SEMI"
Shipments in billions // Bookings/Billions // Book to Bill
oct 99.....1.4...............1.6...................1.08
Nov........1.5...............1.7...................1.11
Dec........1.6...............1.9...................1.19
Jan00......1.6...............2.2...................1.39
Feb........1.6...............2.3...................1.44
Mar........1.7...............2.5...................1.45
- Woodfish poster
For what its worth I just read a piece by Warburg Dillon Reed which loosk at the current cycle of semiconductor chip growth.....they see another 2 to 3 years at the least.... but certainly not anything like ten years......and current growth rate is subject to macroeconomic stability. -Andre
I just read an article on Chartered Semiconductor Manufacturing LTD, CHRT. Seems as though they are ramping up big time. Outsourceing has been mentioned quite a bit lately. By 2004 outsourcing chips could reach five times last years levels, according to IDC. Semiconductors could be this years industry leader, I am looking for the new leaders, and industries going forward these could be the ones to lead us back into a bull market. Along with storage of course! Chips Ha! seems like you always end up with no dip but plenty of chips left. - Woodfish poster
Rock fish: grouper, red snapper
Sweet water fish: trout, (some) bass
Ocean fish: dolphin, tuna
People eating fish: shark, piranha
Bottom fish: flounder, sting ray
Just as you cannot speak of fish as if they were all the same, you cannot talk about chips as if they were all the same. There must be some difference between potato chips and silicon chips. There are commodity chips like RAM, ROM, EPROM, EEPROM and there are chips with more proprietary stuff like Pentium and PPC. There are fabs and fabless chip makers. IBM happens to be one of the biggest chip makers but most of their production is used in house. ARM Holdings is fabless and makes no products at all. So, I would suggest you be a bit more specific in your question. Myself, I would not buy any commodity chip stocks like memory but I am quite happy to have intellectual property that has established a value chain (aka gorillas) such as ARM Holdings. - Denny Poster
I've been working in the semi distribution business for 17 yrs. During the last boom '94-'95 people were saying that the demand was insatiable and the old cycle was dead. It would be good times forever. Well that was just before the longest bust in 20 yrs. The current up cycle began summer '99. It is being driven mainly by communications and networking. The pc industry is not a factor...yet. DRAM is not in shortage right now (think MU). CPU's are just getting tight...so PC sales must be increasing or INTC had more trouble than thought converting to .018 (?). Capacitors,DSPs,FLASH, basically all components but DRAM, are in shortage (Think NSM,TXN,ATML,ADI,MOT,etc..). Shortage means that the manf's raise prices. Contracts are constantly renegotiated in both boom and bust. When companies can not get the semis they need, they double and triple order from different manf's and distributors. The semi manf's see this surge in new orders and start increasing production (and build new fabs, think AMAT) thus building excess capacity to fuel the next bust. However it takes time to bring new capacity on line. IMHO- We are in the 4th inning of the boom. I also think DRAM (think MU) will join the party as Windows 2000 will spur PC demand. Keep in mind that Wall street anticipates these cycles and usually starts bidding up prices beforehand. Hope this helps. - Aloha
I agree with Corrigan. 4/30/00
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The increasing use of chips in phone and temporary PA shortages seen by MOT for their phones indicate the semi run may be well over three years. Internet appliances such as copiers and scanners are another market for chips as well as the tradition PC.
Have to DD Procom and Exodus some more.
Jack |
