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Technology Stocks : LSI Corporation

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To: thomas hayden who wrote (14866)	9/10/1998 8:44:00 PM
From: shane forbes	Read Replies (1) of 25814

Thomas: Yes the INTC news is HUGE! <g> I think there is inventory replenishment here + maybe INTC's new low end processors may be gaining back market share. I do not know for sure. [INTC is a monopoly (duh!) so the rules there are somewhat different compared to other semis.] Just speculating on causes: (a) if it is inventory refill and not a pick up in demand that is still a good thing because a 10% increase in revenues should create a sizeable change in earnings estimates. (b) it is all a seasonal effect - unlikely the increase to around 6.5 billion seems more than just a seasonal pop. (c) it is pick up in user demand - fill up on all the semis then <g> since the stocks are anticipating a global decline in the economies and any change in sentiment will rush "traders" back into the stocks creating what should be very nice fat returns over the next week... (d) INTC's low end processors winning back market share - good for INTC but not a big deal I guess if the gain here in overall demand is negated by losses at other companies... (of course INTC suppliers will gain!) My sense is that it is mostly (a) (with a bit of (b) and (d)) though I am willing to be persuaded that (c) is a real possibility since last q may have been the low point in bookings over this year and next. Again as you imply I am not convinced entirely of (c) because the economies around the world have been crushed. Then again ADI (whom I see as a reasonably diversified proxy for the more mundane electronic things in our day to day lives) last q did say (ending Aug 1 for them) that they thought the q ending Aug 1 was the low point. It actually does make sense to me though I would have liked to see some confirmation from them by now. The stock group that should really be happy is the semi-equips. There are many semi-equips today that won't survive if the semis don't increase spending soon.

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