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Technology Stocks : LSI Corporation

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To: shane forbes who wrote (11959)	4/28/1998 5:41:00 PM
From: shane forbes	of 25814

I've made this argument before but it bears repeating - this is the fundamental driver for a recovery in chip prices. People aren't getting it because there is a lag between new capacity additions and production. But when it comes it will be a sudden increase in prices and an extension of lead times. (Note: the specialized canary LSI is already indicating the latter phenomenom. We'll just have to see if the commodity boys run out of options to get their chips from every Tom, Dick and Harry when Tom and Harry are swamped by a jump in incoming customer orders because of the shortage of capacity. Then again PCs are the big wild card. Give me time...) dailynews.yahoo.com (moronic "experts" and n/t stock market be damned) To support this argument even more Lehman has now indicated a 13% drop in semi-equip sales this year. This is pretty radical considering I think at one point the prognosticators were forecasting +10-15% I believe for the semi-equips. When new capacity goes down chips will start to surge in price. This also gels with Corrigan's observation of supply coming in line with demand something around the middle of this year. Don't ask me why Briefing thinks the semi-equips will rebound and the semis are on their way to greater pain. I'm not sure if theirs is a s/t, i/t or longer forecast. But though Asia is hurting the semis it and other stuff is hurting the semi-equips more. I think the semis were expected to see around the same 10-15% increase in revenue this year and the forecast is down to around 0-5%. Dramatic decrease but not as dramatic as the semi-equips' fall. We shall see if the market is once again messing up its interpretation of cyclical trends in the chip industry. Shane.

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