Paul and all,
Some random thoughts, touched off by Paul's comment:
and echoing ideas many of you have mentioned.
The tide will not switch until 1) Overcapacity situation is corrected AND 2) 300 mm tools are ready.
Chip manufacturers will have to show that they can make a profit to get financing for equipt; govt subsidies will be hard to come by for awhile. That won't happen until the glut is corrected, and that won't happen until mid-99, according to many accounts. Even then, increased capacity will be accomplished largely by retrofitting, rather than new fab construction for awhile (what's the chances anyone is going to build a new 200 mm fab?), so major revenue increases won't occur until 2000. This means we have at least 6 more months of pain (except for skilled traders). Those who want to buy and hold should either wait for a better price (at least mid-20's), or a better time (late 98), IMO. The idea that one shouldn't try to time the bottom in a stock which will be quadrupling in the next 3-5 years has merit only if there is some risk to waiting. IMO, there isn't a chance for this sector to take off for another 6 months (or longer), so there is no risk to waiting. The contrarian view is that the time to buy is when everything looks bleak, but sometimes, things really ARE bleak! If you just must play this sector right now, there are better vehicles, IMO, including ETEC and TER.
Bob |
