Mephisto,
re: "Unfortunately, many market analysts are unable to differentiate the dram makers from those semi-players that do not make chips for the old fashion PCs. I think this could be one reason why there has been so much confusion in the semi-conductor industry.
On the other hand, a few market analysts have recently recognized that the old fashion toys will have to compete with the new fashion toys this Christmas and down the road as well."
The old fashioned toy, the PC, has been growing at an average rate of ~17% a year for many years. The period from mid year '99 through the second quarter of '00 was exceptionally strong, so we were due for a weaker period. And I'm sure that thousands of IT managers around the world will be interested to hear that a PC is a "toy", they probably thought they were buying productivity tools.
As for the new fashion toys, I agree that they are taking dollars from PC's in the consumer space. The problem is, almost all of them use flash memory, and as a holder of several flash memory stocks, I've sort of noticed that those stocks are dropping like a rock thrown off a very tall building. It seems that regardless of how many new products are coming to market, the analysts, and large investors, assume that capacity is going to be larger than demand, so the products will become commodities with lousy gross margins.
Let's get constructive, what semiconductor stocks do you recommend to take advantage of these new toys?
John |
