IDTI - an IC Play on Growth Markets Message Board

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Technology Stocks : IDTI - an IC Play on Growth Markets

IDTI 48.99

0.0%

Mar 29 5:00 PM EST

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To: Taut Knot who wrote (11403)	6/20/2002 7:10:13 PM
From: Rob S.	Read Replies (1) of 11555

I expect something of a relief rally before or around the 4th of July holiday period but then probably more downside through October. This will eventually create a time to load up on this sector. If your looking three to 5 years out then the semis look reasonably safe as a group. Shorter term is likely to see more bombshells exploding. One friend tried to convince me that because the semi equipment companies are doing relatively well that this is a sign of a robust recovery for the semi manufacturers. In the past that has often been an indication of underlying health and optimism. But it's significantly different this time: several of the largest semiconductor companies are pressed to spend on equipment and new fabs even though they may have sufficient capacity currently. They are forced to move on to smaller geometries and new fabrication methods to enable them to produce faster, less power consuming parts. The newest fabs are capable of copper metalization, nanometer feature sizes, and silicon on insulator. intel,AMD, UMC, TSC, Micron and others who sell commodity parts and are in the GHz race must move on to the new fabs even though the near term prospects for business improvement look relatively bleak. Besides enabling products needed to stay competitive, the new fabs are more efficient and provide a lower cost structure for these volume manufacturers over time. For the smaller companies the enormous cot of the newest generation of fabs is increasingly forcing them into the arms of UMC, TSC and others who can distribute the cost out over a greater amount of production. I think the semi sector takes two to four years to reach previous highs.

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