Ted,
<SI shows 72 1/2 day low, but at least were back up to 75 1/2 now.>
Nice that you find a silver lining but what a brutal day! I like Jonathan Joseph's research but the timing on this call was wrong and he downgraded the wrong companies.
Having been a part of this industry I know a downturn will come and I agree with Joseph that we may be near the top of the cycle. I am not sure that we are there but clearly there are a few signs.
Now assuming we are near the top, the question is which semiconductor companies should go on the watch list? The answer is quite simple. Start with commodities first! Wherever there is strong second source possibility, customers will squeeze the vendors to take advantage of the situation. More suppliers means lower prices and lower profitability.
So, I think the order of collapse in case of industry down turn should begin with DRAM-intensive companies (MU), next should be SRAM-intensive companies (CY, IDTI, ALSC, etc), next in the list should be flash-intensive companies companies (SNDK, SSTI, ATML) and then come the least competitive/commodity areas like microprocessors (INTC, AMD).
Joseph seems to have garnered quite a reputation in one day but the guy simply blew it. (I still like his fundamental, non-trend calling research).
Chuck |
