@Joe
I liked the new presentation format very much too. When you
ask me it has to do with the extremly low share-price. As
Bertrand in the call said, the market is valueing SP1 like
junk, thats it. And because the have to act, convince the
market, SPSN has to show much more internals then others. As
a shareholder I could only say fine, comp. wise I don't know
if such details aren't too much -> comp. will get SPSN-interna,
but I could imagine that what SPSN showed to us, the key-comp.
also know whats going on, at least roughly.
I heard the copper conversion in FAB25 with a surprise too.
Thats why FAB25 didn't performed too well in 2007,
especially in the first half. Seems like this "old" FAB is
good for our business. I have said in the past, that I can't
imagine, that SPSN is doing much in FAB25 (65nm), because
they have to save money. Thats what we saw in the slides. The
65nm FAB25 share is small and stays small. I could imagine,
that if we would have +500 more cash on our hands, the 65nm
conversion would be much faster. The same could be said to
SP1. Its pretty pitty that SPSN couldn't go on as fast as
they potentially could because of money restrictions. The
2K ramp in SP1 couldn't be faster, thats what I believe, also
when you throw more money down the line, but after this,
they stop instead they could (if they would have more cash)
ramp further. When you ask me, the ramp will ONLY! depend
on the market progress. If the market is overall good to us,
I'm seeing SPSN ramping faster. If not, they have to stick
with existing goals. We could only imagine, how much costs
could be saved, if SP1 ramps to 4-8K and SPSN goes to 45nm
and Quad over time. This will not time, of course, but the
existing progress done to "only" 90nm in FAB25 and new
65nm 300mm stuff is very good progress, the other parts
should be legacy on longer term contracts. Its SPSN task to
switch also "old" costumers down to 90/65nm over time.
What I clearly missed in the call was the SFUN takeover. No
mention from SPSN and no question in the Q&A. I have looked
into the yahoo finance page and there is no SFUN earnings
date actual in the table (Q4). I would guess, the SFUN will
report the last quarterly number for Q4 alone.
The "huge" foundry part compared to FAB25 in 2007 surprised
me too, I hadn't thought this is/was already so much. So if
SPSN could ship more volume from the own FABs alone, it
should be cheaper and its good to hear, that they could
squeeze more volume out this FAB. From the whole NOR market
perspective its good to see, that noone seems to ramp much
capacity in the next time. Its tough to argue for Newco and
Samsung, but from Newco we clearly heard nothing and I
assume, that in the current unclear environment, they don't
want to do anything "wrong". If Newco is a done deal at
the end of Q1 - which seems the current path - they will
enter Q2 as a standalone company. It could take 1 quarter to
evaluate what they will further do in the next near future.
So I expect something to hear from them at the end of Q2-2008.
If they decide to do something, which has to be seen (cash
needs?) - it will take much time to make these decisions
in real life happen -> at least 3-4 quarters when they do
something "more". So the first "new" output would come online
mid-end 09. Thats real good news for the industry.
If the ASP trend could walk into a better situation has to
be seen, SPSN seems cautious when it comes to Q1. I'm still
looking for a much more healthy environment, once Newco is
finally in place. I'm sure they will take massive actions,
once they have to report seperate numbers and I'm still
interested to know, how much value the market will give them.
Some variables are still unknown, clear, but we know, that
SPSN is valued around 400mio. without SFUN. Newco has the
same marketshare and probably much higher losses, so a
reasonable first rough valuation would be 300-600Mio. for
them. Prior math showed implied valuation north of 2000mio. -
seems like a large, very very large spread to me and I
couldn't wait how this will work out.
The DRAM market saw some higher prices in the last 2 weeks,
but the overall pricing level is still extremly rough. If
prices don't rise sharply now, Q1 ASPs will trend further
done and volume increases QoQ will be tough. With QIs
yesterdays numbers, they showed over 500Mio. € losses, which
is north of 700Mio. $. I assume roughly the same for Q2.
So, QI lost some 1,4-1,5B $ in just 2 quarters. Infineon
is by for the major holder and they don't let QI die, but
the situation is so worse, that something has to happen,
a sale, a merger, a reintegration or or or. MU looks not
nice too these days and I'm interested in Hynix numbers for
Q4 which could at least hope for some NAND related support.
We have heard of many hard CAPEX reduction for this crowd
already and I could imagine, we will see more in the next
time, as Q1 sinks into the brain. BTW, QI called for sharp
reductions in the yesterday-call. I want to hear some thoughts
from the asian crowd which will suffer hardly too. This
market has to go through a tough environment and many steps
has to be taken in the next quarters which is long-term only
the right path - too bad the big bosses didn't took actions
2 quarters ago already.
Last line to SPSN. I don't know what the market thinks about
SPSN, but the rev. number was mainly inline with forecasts
and GM was much better than I thought by myself. If we take
the midpoint for Q1, they came in also roughly inline.
Official numbers are one thing, but you look at the share
price, I assume the market implied much much worse numbers.
So, SPSN reached for me the low level now (will of course
depend on overall markets) and could now walk up to 4$ in
the next time. The next move will happen, once the FINAL
Newco details are know. I expect sharp value reductions
for Newco and up-valuation for SPSN on this relative base,
which will lead to 6-8$ once the details are known and once
the 2008 path for SPSN gets clearer. After this it will only
depend how SPSN will perform.
One last thing to mention. I still don't know, how Eclipse2
should work in Serversystems with DRAM. This whole topic
is clowded in heavy dust for me. If I understand it right,
Eclipse2 should be extremly fast (read/write too) otherwise
this wouldn't make sense. And with current low DRAM prices,
NOR prices has to be cheap too just to make such a product
happen. Again, I haven't understood what they want to do
here and were the difference between this design and an SSD
is. I see its on a much "lower hardware level", very
integrated into the system and very DRAM-near, but again,
I don't know how this should work and what the key benefits
are. For me, the SPECS (NOR) has to be so good to make this
happen, that I can't believe SPSN could reach this with
Eclipse2. Would be too good to come true.
BUGGI |
