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To: ynot who wrote (62455)	9/22/1999 2:30:00 AM
From: puborectalis	Read Replies (3) \| Respond to of 120523

yes......more on Taiwan quake...... Taiwan quake sparks chip aftershock With 12% of the world's semiconductors and nearly half of all motherboards made in Taiwan, industry braces for impact By John W. Schoen MSNBC Sept. 21 — The earthquake that rocked Taiwan is sending reverberations throughout the global semiconductor market that may echo for weeks or even months, say industry analysts and executives. While the long-term impact is not yet clear, most expect higher prices for some chips and a scramble for the components made by several key Taiwanese chip plants. EARLY REPORTS INDICATE that the damage to chip plants clustered in the Hsinchu Science Industrial Park was limited to broken glass and downed power lines. Initial estimates place total damages at about $150 million. But the process of making semiconductors is extremely sensitive to vibration and dust. That means half-made chips will have to be discarded. And recalibrating sensitive chip-making equipment could take several weeks — or longer. “It will take a while,” said Dan Niles at BancBoston Robinson Stephens. “It's not easy to make sure a billion-dollar fab is running right.” In fact, the full extent of the damage may not be known until the first batch of chips rolls off the line after production has been restarted. “You can do all the calibrating you want, but in the end you may discover there's more tweaking you have to do,” said Drew Peck at S.G. Cowen & Co.. “You have to have a full production cycle of 6 to 8 weeks to find out if there are problems. That's just the nature of the semiconductor industry. This kind of uncertainty may overhang this business for awhile. ” Merrill Lynch semiconductor analyst Joseph Osha says the Taiwan quake will likely disrupt chip supplies for about two weeks. Semiconductor production in Taiwan is booming, thanks to strong demand for chips used to make everything from personal computers to cellphones. Taiwan makes some 12 percent of the worlds chips, including supplies for so-called “fabless” chip companies that farm out production to foundries. At Taiwan Semiconductor Manufacturing Co., {TSM} one of the world's largest foundries, business is up sharply this year. (Philips Electronics owns 28 percent of the company.) Second quarter profits jumped 60 percent, and the company said it was running at full capacity and turning out record shipments of silicon wafers. Demand typically increases in the third and fourth quarters as PC makers gear up for Christmas sales. RIPPLE EFFECT “If (production is interrupted for) one to two weeks, pretty much everybody (in Taiwan) can recover from that — provided they can get their employees to work,” said C. Vin Prothro, CEO of Dallas Semiconductor {DS} . “If it's longer, there could be a Christmas season delay. It can absolutely have a ripple effect.” Taiwan's other major chip foundry, United Microelectronics, is also expected to be offline for several weeks. Shares of semiconductor makers Xilinx {XLNX} and Altera {ALTR}, which farm out production of their chips to Taiwan, sold off sharply Monday on fears of the impact of a supply interruption. (Altera officials said Tuesday they believe they can make up for most of any chip shortages from other sources.) Other companies that get half or more of their chip supplies from those Taiwainese foundries are C-Cube Microsystems {CUBE}, Broadcom {BRCM}, Galileo Technology {GALT}, Conexant Systems {CNXT} and PMC Sierra {PMCS}, according to analysts. Taiwan is also a major supplier of assembled circuit boards, including the motherboards used to make PC and notebook computers. With peak demand looming at year-end, shortages of those motherboards could hurt PC makers — who have been keeping their inventories of finished products tighter than ever. LIMITED IMPACT Still, some analysts said they expect the long-term impact to be limited, saying any shortfall in sales will be made up once supplies increase again. “It doesn't effect the demand for chips, which is what investors pay for,” said Dan Niles, a chip industry analyst at BancBoston Robertson Stephens. Tad LaFountain at Needham & Co. says he thinks the supply shortfall will be muted by a drop in demand for chipsets that go into PC motherboards made in Taiwan. “Roughly half of all the PC motherboards come out of Taiwan,” he said. “Initially people felt this would be a boon to semiconductor pricing. As they think about it more, they're going to recognize it's also going to have impact on consumption.” The long-term impact may not be fully known until early next year, when chip makers report profits for the final quarter of 1999, according to Prothro (who said Dallas Semiconductor gets none of its chips from Taiwan.) “We'll have to see how may, if any, blame lousy results on this thing,” he said. “On the other hand, if you're having a bad quarter, this is a Godsend.”

To: ynot who wrote (62455)	9/22/1999 2:34:00 AM
From: red_dog	Read Replies (1) \| Respond to of 120523

I didn't think you Canadian's stayed up this late, or are you on the West coast. <g> MSTG held up pretty well today, did you see that Rev. gain in SPEC... Rg

To: ynot who wrote (62455)	9/22/1999 2:34:00 AM
From: puborectalis	Respond to of 120523

AOL positive comments from Ragingbull thread......... AOL a Value!..Understates earnings.... The following appeared in a WSJ article by Patrick McGeehan and Pui-Wing Tamon on 8/20/99 entitled "It Depends on What Your Definition of "Value" Is..." but bears another mention and is loosely paraphrased. When it comes to Wall St. "value" is in the eyes of the shareholder. Technology companies in particular are harder to measure by traditional accounting standards due to several factors in particular defining and valuing tangible/intangible assets. Some value-oriented fund managers, including Bill Miller of Legg Mason Value Trust (the top performing mutual fund manager of the decade beating the S&P 500 each year) have adapted to those changes by focusing on different measures, such as cash flow or returns on invested capital. Miller's fund has ridden AOL for a gain of about 3,000% and feels that AOL understates its true earnings by aggressively charging off the costs of signing up subscribers. Much of that investment is a valuable asset that doesn't appear on the company's balance sheet, making traditional book value and PE ratios less useful. With AOL trading at less than $90, Miller stated a view that was likely to anger his critics: AOL was undervalued by as much as 20% and he had been buying up shares for a fund he is managing for an insurer. His Legg Mason Value Trust fund continues to maintain its largest position in AOL. Lee Owen, manager of Flag Investors Equity Partners (another value fund) has also owned AOL for years and it now comprises 7% of the fund's assets, "we're value investors in the sense that price is important to us at the time we buy a stock, but we will buy high-growth companies when their stock price is beaten down". IMO: AOL has stated in the past it's goal is to become one of the most respected companies in the world both on Main Street and Wall Street, i.e. their NYSE listing as opposed to over the counter. They will most probably become the first Dow Jones/ internet stock at some point. They know how to play the earnings game ala Cisco and Microsoft. Make every quarter and exceed expectations by just enough in a very "managed" fashion never stubbing your toe along the way. As a matter of reference Microsoft is in some trouble over cookie jar tactics ( saving earnings for a rainy day) and could maintain earnings estimates for several years into the future even if profits actually dropped by changing depreciation and other accounting methods valuing assets and goodwill. Pay close attention to how AOL always beats the analysts expectations by 2 cents a share every quarter. The whisper number usually factors this in. I foresee many years into the future AOL managing all their multiple revenue streams in a manner that will always insure "beating the street". If they do we all might just have a serious capital gains problem on our hands. (Voluntary Disclosure: Position- Long)