ReHowever, DRAM prices lead the fundamentals of equips out of Whoville. Semi stocks and equips correlate nicely with DRAM prices. This is because 50% of global equipment spending is targeted at commodity chips
In aggregate this may be true. However, many cos., namely AMAT, who have suffered lately have seen their DRAM exposure fall from the 50%+ of 1995 to the 40% level at the present and it continues to fall. This leads me to believe that analyts have already priced in a continued abatement of DRAM spending. The trend is and has been lower and the Korean situation only exacerbates the problem. However, my point is that it is priced in to such a degree that many analysts are writing off Korea entirely IMO.
IMHO, at the present there are far more reasons to be bullish on this sector than not:
Windows 98 will require 64 MB of DRAM. To multitask, I assume that the number of MB needed will probably approach or exceed 100MB if the history of MSFT is any guide.
Merced is coming online in about a year and AMD, Cyrix et al must either compete(i.e. spend) or die.
The sub-$1000 PC will draw many people onto the 'net and they will soon find out that a P166 w/ 16 MB of DRAM is painfully slow. Some, not all, will see the need to migrate to faster architectures.
Voice Recoginition should become mainstream in the next 2 years further acclelerating the need for faster systems.
And finalyy, PRICE!
I am not enumerating these points to enlighten you as to what the future holds. The people here at SI(esp. on this thread) are very intelligent and many of them are writing the rules for the future as programmers etc. However, if a dolt such as myself can see the obvious uses for PC's, then so can the PC manufacturers, chipmakers etc. There will be a place at the table in the 21st Century's technology sector for those who can compete now! If they choose not to do so, their place at the table will undoubtedly be occupied by someone else.
Regards,
Brian |
