Ring the Bell - When to sell semiconductors? Message Board

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Technology Stocks : Ring the Bell - When to sell semiconductors?

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To: Proud_Infidel who wrote (15)	1/26/2004 5:28:49 PM
From: The Ox	Read Replies (1) of 34

...The combined circumstances of greater fiscal restraint and the ability to quickly add incremental capacity mean that companies no longer need risk overshooting demand by a large margin; thus the pendulum mechanism that caused the industry to swing from rapid demand growth to massive overcapacity no longer ticks. "There will still be cycles, but not the huge gaps we have seen in the past," Jelinek said.... I disagree with the "ability to quickly add incremental capacity" statement. It still takes at least a half a year and more likely over a year to have the added new equipment come "on line", even if the shell and all other support mechanisms are in place. At least that's what most industry insiders say. The problem continues to be that with a one year lead time and everyone ordering at the same time, capacity gets added at the top of the cycle. I don't see how the cycle can end without some form of a bust?

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