Hi bearshark,
I agree that there will be a lot of blood-letting in the semiconductor industry.
For me, the big picture is straightforward: Average unit prices of PCs are declining faster than unit volume is increasing, therefore, total industry revenue will decline. With declining total revenue, companies will compete fiercly for market share. Since semiconductor manufacturers have high fixed costs and low marginal costs, competitors will produce at a loss, until enough companies go out of business.
Since the market looks ahead, the semiconductor industry will be valued lower in the future.
A look at the SOX shows it last peaking around 300 in September 1995, dropping to about 150 in July 1996, then climbing to around 400
this August / September (up around 167% in one year!). Today, it looks like it's decided to head downward:
tscn.com
BTW, I liked your post (BK#5685):
techstocks.com
I think you gave me vertigo following the ups and downs of the market of the seventies.
Best regards, John. |
