Good thing Nano is smart, Korea won't be buying much for awhile:
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Chip stocks to outperform market as fab spending falls, analyst says :
techweb.cmp.com
SAN FRANCISCO--U.S. semiconductor stock prices should outperform the S&P 500 index in 1998 because of strong demand from personal computer manufacturers, increased sales to communications applications and a firming of memory chip prices, according to Jonathan Joseph, a senior research analyst at NationsBanc Montgomery Securities.
During an annual investment conference here this week, analysts from the securities firm presented forecasts on a number of semiconductor sectors. Joseph said he based his stock price prediction on the correlation between expected strong demand for chips and an expected reduction in semiconductor capital spending in 1998.
Historically, he noted, semiconductor stock prices rise when capital spending falls but demand for chips rise. In 1998, total semiconductor capital spending is expected to drop 5%, while chip demand is expected to increase by 10%, suggesting a good year for semiconductor stocks, the analyst suggested.
Joseph predicted "sustained, double-digit growth" of demand for chips used in personal computers, including microprocessors, digital signal processors (DSPs), microcontrollers and microperipherals. Also, he said he expects increasing demand for semiconductors used in digital wireless telephones and cellular networks, as communications networking software is increasingly embedded directly on semiconductors.
DRAM prices should firm as the year progresses, according to Joseph.
When it comes to the Asian financial crisis, Joseph believes semiconductor stocks have already absorbed the bad news from the region. He said that concerns about slowing demand from Asia are real, and that the Asian "flu" could spread to China and Japan.
But on the positive side for global chip makers, Joseph said major Korean chip makers, such as Samsung, are now slashing their capital spending due to their inability to borrow, and as a result, they won't be able to add capacity that might have put further pressure on commodity chip prices.
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How are the Koreans faring?
exchange2000.com
Douglas |
