DRAM Oversupply Has Infineon On Hold
Mani, everyone knows DRAM pricing is weak.
1) It is starting to be recognized that DRAM is going to be less and less of a factor in fab expansion going forward. I can't find the link, but the other day BBRS said 20& of the expansion will be DRAM this time, down from I think 60% last time. The main driver this time is going to be telecom, like the tiny phone I carry around in my pocket all day, more CSCO routers, VoIP chips, etc.
2) The DRAM market is still expected to reverse later this year. We have Win2000 coming out, Asia recovering, etc.
If I may steal a little of Andrew Vance's RadarView this am
“In relation to the 10-year Treasury yield and 12 month
forward IBES earnings estimates the S&P 500 Index is 34% overvalued...With that said, we are still very bullish in the semiconductor sector and think these stocks will weather any upcoming storm...The semiconductor sector is well off its recent highs and is not necessarily overvalued. We must make that distinction. The protracted downturn has created a situation that demands capital expenditures in order to move forward. We have seen all the positive indicators we have looked for and continue to see positive momentum in the marketplace.
Jay |
