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Technology Stocks : Tower Semiconductor

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To: virgil vancleave who wrote (534)	12/2/1997 10:51:00 AM
From: slob	Read Replies (1) of 1853

Virgil, Good Analysis but not for Semi's. Semiconductors is one of the only real free markets that I know. They are so easily transportable and interchangeable, no one cares what stamp is on the case. This is especially true for the commodity "memory" end of the market. Flash and EEPROM are both commodity parts. They are seeing exactly the same pressures as DRAM market and infact swing very much in synch with DRAM's. Look at what happened to DRAM's between Dec 1st 95 and Dec 15th 95. Prices fell from around $12 for 4Mbit down to $6 for 4Mbit. Everyone expected a rebound but here we are 2 years later with 16Mbit DRAMs selling for under $4. That means that todays prices are 1/12th the cost per bit that they were two years ago. Now look at what this means when you own a company that has 29% margins during the good times. You can find that cash per share being replaced by Dollar notes shipped per chip, and this can happen in the space of a week or two. I don't think that TSEMF is a stock for the Value minded investor, you need to understand the market and be prepared to exit quickly before you get involved with a stock like this. Anyway thats just my opinion. Slob

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