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Technology Stocks : Alliance Semiconductor

ALSC 0.810

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Jul 10 5:00 PM EST

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To: quartarpint who wrote (8587)	9/27/2000 8:42:39 AM
From: Ken Muller	Read Replies (1) of 9582

Clive: <<If there is a need for these older chips what's wrong with a company filling that need?>> Nothing wrong at all. Its great to see the growth. However, supply will catch up with demand eventually. At that time, the increased prices that ALSC (and others) are currently enjoying will settle back to the normal low margins. Without new leading edge products, ALSC will not be in a position to maintain their revenue growth or their margins. ALSC is in an unusual position because most companies have to fund new products and R&D from current memory profits. In ALSC's case they have generated huge profits from investments. ALSC seems to be satisfied with investing that capital into other investment divisions. While there are certainly profits in that area, the market tends to reflect the asset value of those profits rather than assign a high P/E value to them. ALSC's competitors in the memory business are cranking new designs out at a high rate. I believe ALSC is missing a major opportunity.

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