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Technology Stocks : FSII - The Worst is Over?
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To: Joe Dancy who wrote (1394)8/29/1997 10:36:00 AM
From: Running Bull   of 2754
 
I have heard this guy speak and he has a compelling story. Volume is tied to the prolifertion of chips into more and more consumer products. Also tied to the increasing electronics content of the automobile - forecasted to be up to 25 % of the value of a car by the 2000 - 2001 time frame. Point being, that the chip business isn't or won't be necessarily tied to the swings of the computer business like it is or has been in the past. Also driven by the growing consumer market in the far east. The computer has a huge penetration into the US market, but even Europe is way behind. The benefits of this investment in the US economy is what has made the US dominant and competitive again on a global scale and for other countries to compete they will have to make the same investment.

If the chip market grows to $300 million, historically 20-25 percent of sales is spent on new capital equipment. This translates to a $60 to $70 billion equipment demand as opposed to the current level of $25 Billion or so. So all if you trust the above assumptions, we should see a trippling of revenue in the next couple of years if everyone holds market share. If we pick the right horses, they will do even better than that. So long term there is compelling logic to stay fully invested in this sector.
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