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M.Burke secret analysis of "DRAM SCAM" deep throated to Merrill!
Monday September 14, 11:44 pm Eastern Time
Further drop seen in chip stock
prices-Merrill
SEOUL, Sept 15 (Reuters) - Shares of U.S. and other semiconductor makers
are expected to show continued declines as a recovery in personal computer
demand has failed to materialise, Merrill Lynch said in a report obtained on
Tuesday.
''We are still looking for evidence of a recovery as well, and the longer lead
times and improved pricing that we believe signals a real turning point have yet
to materialise,'' said the report, dated September 14.
''We expect semiconductor stock prices in the U.S. and other markets to continue to decline.''
The report did not include any changes in Merrill ratings for the semiconductor firms.
Despite increased business at PC motherboard and electronic equipment makers in Singapore and Taiwan, Merrill said a
key question was why things had improved and how long it would last.
''It is not clear that any of the PC motherboard or electronic equipment makers see a sustainable improvement in end
market demand, nor have our analysts been able to verify any improvement,'' it said.
It said attempts to grab market share and unsupported hopes of a recovery in PC demand appeared to be the reason behind
the accelerated business activity in the two sectors.
The report said it was doubtful closures of old fabrication plants and a planned merger between two South Korean
chipmakers would immediately lead to an easing of the global oversupply.
South Korea's LG Semicon Co and Hyundai Electronics Industries Co have agreed in principle to merge their
semiconductor divisions under a government-initiated restructuring drive to ease domestic overcapacity in the chip
industry.
''We find it curious that some industry watchers are interpreting the combination as good news for the industry,'' the
Merrill report said. ''There has been no news of planned fab closures at either company.''
Global semiconductor stock prices have underperformed markets during the past six weeks but South Korea was an
exception, with the country's ''big three'' DRAM makers having outperformed the market by 51 percent, it said. |
