SSTI:
To: Eric Ziegler who wrote (594)
From: hueyone Wednesday, Jun 28, 2000 2:37 PM ET
Reply # of 603
Message 13955551
So, what's the odds that some of those rather dramatic 2001 earnings revisions for SSTI were penned by SSB and CSFB? The odds are good; SSB pens $3.50 EPS for CY 2001 and CSFB pens $3.35 EPS for CY 2001. If these two SST underwriters were the only analysts penning high EPS estimates I would be very concerned, but according to the same Yahoo site there are 7 analysts reporting with a range of estimates of between $3.35 and $3.59 EPS. The Market Guide site shows 9 analysts reporting, all with Strong Buys, and a mean estimate of $3.41 EPS for 2001.
biz.yahoo.com
yahoo.marketguide.com.
Apparently the analysts have been busy (upgrading EPS estimates over the last 3 months). In the last three months SST has made a number of announcements warranting greatly increased optimism:
1. On April 3, Intel announced it would stop competing with SST to provide flash memory for Intel's own 800 series chipset family. Instead Intel decided to rely solely on SSTI to provide the flash memory for the chipsets.
techweb.com
2. On April 11, the company increased capacity by signing on to use NSM's South Portland, Maine fabrication facility.
3. On April 29, SST blew away second quarter EPS estimates by 48%, .34 versus .23 expected EPS.
4. In the April 29 earnings release, we also learned gross margins had increased to 41.5% from 30.3% the previous quarter.
5. In May, SST stated that it already had 10 million units of backlog for its firmware hub chips (flash for the Intel 800 series chips), that it will commence shipments in June, and that it has been making joint sales calls with Intel's sales force promoting the devices.
6. On May 22, the company reported another victory in the Atmel litigation.
7. On June 12, SST announced the company expected to ship over 400,000 units of SuperFlash Firmware Hub products in June.
Further comments: I am beginning to believe SST has some excellent IPR in its patented Superflash technology. Even Ausdauer gave this technology some respect when he said: The low cost structure of Superflash is interesting and SST's development of a thick oxide process with fewer manufacturing steps appears to give them a distinct advantage. SSB had this to say: The company's Superflash technology, which has an inherently lower cost structure than conventional Flash devices, allows SST to mine the low end for significantly greater profit. CSFB had this to say: We believe when industry capacity begins to coincide with demand, the flexibility of the company's technology will allow it to shrink all device densities to smaller process geometries, further reducing its costs. SST's patented Superflash technology offers it the flexibility to balance available wafer capacity and cost.
I also suspect that competition is increasing faster in the high density Flash market than the low density Flash market. SSB notes that Intel left the flash memory business for Intel's 800 series chipsets to SST to chase higher density opportunities. CSFB said We believe many of the larger semiconductor suppliers with flash offerings will continue to chase high-density only solutions, creating even more opportunities for SST.
|
