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: rairden who wrote (11437)	10/3/2002 10:24:25 PM
From: Rob S.	Read Replies (3) of 11555

I think the semis are a short term buy. You know I haven't said that a lot recently. The way things have worked out for the sector is pretty much as I had expected: the market driver sectors are off, particularly telecommunications and PCs. The underlying trend is for increased use of the type of high speed circuits IDTI makes but there are also some negative trends in the ointment. These include increased use of SOCs enabled by new processes such as mixed signal on SOI. These new processes enable high speed circuitry at high levels of integration and with greater isolation between circuits. This results in lower noise floors and ability to combine otherwise impossible capabilities such as power and high sensitivity input sections. One result can be less reliance on sub system components. IDTI has reached a high enough level of integration that this trend probably won't be so negative, but time will tell. Another trend is IC customers are under pressure to cost reduce their products and that puts pressure on their suppliers. Anyone who has been through this degree of a downturn knows how this works: competition is bloody and there are fewer sacred cows - parts can be designed out if there is some cost savings. The general environment will remain under stress for several months. The volumes are increasing and the overall economy is slowly showing improvement. But corporate IT type spending is more conservative and the communications sector remains sick. That leads to a climate in which price will remain under pressure and buyers will stay in the drivers seat. So volumes may increase 10%-20% while sales and bottom line increase only modestly, if at all. This reality has probably sunk in enough to warrant buying. Short term I think there are buys out there but it may be a while longer before any good news.

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