Anlayst's thoughts on semi-conductor cycle.
Excerpt form Hardware highlights by Piper analyst Kumar
By Janet Haney, CBS.MarketWatch.com
cbs.marketwatch.com
Excerpt follows
Some of the factors that are driving above-trend-line growth rates in the semiconductor cycle that I believe are multi year are as follows:
you have broadband access, wireless, consumer and industrial computing. So, this demand cycle is much broader and more durable than the prior cycles because of the multiplicity of the end market, geographies and applications.
CBSMW: Should long-term term investors be concerned with the daily ratings and estimates calls from Wall Street analysts?
Kumar: What people need to step back and look at is the long-term trend line. There will be oscillations around the trend line, so there would be issues, geographic strengths and weaknesses, product introductions or lack of and so on.
The key question that we need to ask: ‘Is that just an oscillation or is it impacting the trend line?’ That’s what the individual investor needs to ask.
What people don’t recognize is that these stocks find their own center of gravity. Rating changes, earnings estimate changes, may impact the stock for a very brief transitory period, but over the long run, the stocks find the true value, the center of gravity, in respect to, of an analyst comment or not.
CBSMW: What is your overall outlook on the PC and chip sector ahead of earnings?
Kumar: I’m in a unique position, because I cover the whole food chain - the product suppliers as well as end system manufacturers.
What we are seeing for the second half, is very strong demand worldwide. PCs,communication, wired and wireless, customer premise, INFRASTRUCTURE EQUIPMENT-- so it’s a broad-based demand driver.
That’s why we think this up cycle is much more durable than the prior cycles. |
