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Technology Stocks : Semi Equipment Analysis

SOXX 283.58

+0.3%

4:00 PM EST

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To: The Ox who wrote (2897)	4/25/2002 11:06:36 AM
From: BWAC	Read Replies (1) of 95467

Michael, Your numbers and rationale seem very good to me. I cannot argue, nor suggest a better way to arrive at your calculated conclusion. Its a clear, concise, reasoned, valuation and analysis. But does it give a relevant answer at BOTH the peaks and depths of a semiconductor cycle? As in we all know by now that business sucks for AMCC. Your calculated 7X is definitely a high number if we were near a peak. Amazingly people were falling all over themselves to pay 10X your 7X at the peak sales for AMCC. Why I don't know? Anyway I don't find it inconceivable that current revenues could significantly increase (at some yet to be determined future date)leading to a ratio much lower than 7X and nearer your target ratio. Further your model gives no consideration to the operating leverage of a fabless chip company during a period of increasing sales. IE Revenue could double with a much lesser corresponding increase in operating costs. Is there any room in your model for such business cycle events?

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