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Technology Stocks : FSII - The Worst is Over?
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To: Kent Sarikaya who wrote (1142)7/7/1997 10:10:00 PM
From: wm sharp   of 2754
 
The article offers generalizations. Was it folks at AMAT, KLAC, or PRIA who were selling? Perhaps NVLS? Or, was it insiders at cash rich companies selling near book (e.g. FSII, UTEK, SVGI)? An important distinction - given the valuation disparities in the sector - apparently overlooked in this latest salvo of media gloom re the semi industry. Makes good headlines anyway.
I'd say some "selling into strength" following "the worst downturn in 10 years" is to be expected. Human nature. The article even notes that industry insiders are typically compensated heavily with shares. I'm personally not surprized to see them taking home some pay after sitting out an extended period of ridiculous valuation that had nothing to do with either the long term fundamentals or the promising state of their R&D.
A better indicator of the future, IMHO, is the ongoing consolidation. Let's sit back with our cash rich companies holding strong R&D and mf capacity, and watch what the big guys do to the "little" in the months ahead. I think U.S. equipment companies are setting themselves up for the next big upturn. And big it will be.
Seems to me the fab announcements coming out of Taiwan recently are significant. These are LARGE sums of cap ex - much of it to be 300mm. Perhaps I'm giving U.S. equipment suppliers too much credit for altruism, but I think they'll be putting their collective heads together for some huge payoffs on years of R&D. The SIA's upcoming roadmap puts them two years ahead of Moore's Law by 1999. Presumably, someone's going to need physical equipment to pull this off in a commercial sense!
Bill
techstocks.com
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