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Strategies & Market Trends : Guidance and Visibility

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To: Jorj X Mckie who wrote (62989)	7/28/2002 6:28:56 PM
From: t2	Read Replies (3) of 208838

TSM is the world's largest chip foundry. That can't be good news for chip and chip equipment stocks especially. Lower capacity utilization and a lower capex budget. When NT warned in Sep/Oct 2000, it was a first time during the optical boom; they were the undisputed leader at the time.....you can see that stocks like JDSU, GLW were hitting the highs in August 2000..and not when Naz was at 5000 in March2000. That put the JDSU, NT, LU, CIEN, GLW types of companies into an incredible stock price collapse in the coming years...much more than the Nasdaq or semiconductors. It seems these names did not bounce much at all during the bear market are basically penny stocks now. We saw how AMAT declined about 15% on Thursday...that was due to TSM, no doubt about it. Semiconductor capital equipment was also a sector that fund managers started buying this year, believing we are at the start of a multi year up cycle...that was the hope or expectation. In hindsight the September/October 2000 NT comments were the start of the bursting of the optical stocks. So it is not unreasonable to make a case for the TSM news to be the start of the collapse of the chip sector. Have to remember that there was a lot of hope that the semiconductor cycle bottom was in last year...and if that was a wrong call, chips have a long way down..much more than the Naz itself, imho...looking for a short term rally in these to pick up shorts. It might not have been NT's earnings which were out in October...could have been analyst call of Paul Sagawa that downgraded it in September2000..i think. Note TSM's comments were that this is just a "pause"...that seems similar to NT's comments from that time period. btw-- Many of the chip equipment names don't have debt so one can conclude they will not drop as much...but I would note that JDSU had no debt either back then (and not much competition either---bought the main competitors).

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