Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey D who wrote (32615)	9/25/1999 9:37:00 PM
From: Ian@SI	Respond to of 70976

Interesting extract from a Barron's article on Taiwan... Power has already been restored to some of the biggest and most important assembly and test operations in Taiwan. Last week, fire broke out at World Wide Semiconductor Manufacturing after a backup generator overheated. Still, the company indicated that the generator was apart from the wafer processing clean room, and the fab production equipment escaped unscathed. Because assemblers had larger-than-normal backlogs and products to test before the quake, Deahna contends, they should be able to keep shipping chips until the foundries deliver new wafers. In addition, major PC motherboard and peripheral suppliers in Taiwan have already resumed production, Deahna says. All in all, the earthquake in Taiwan will have a one to two-week impact on the semiconductor supply chain, Deahna says. He thinks many investors overreacted, expecting the damage to be far more severe. "The selloff has been overdone," he says. "What's happening today is not really related to Taiwan. It's about the broader market." The cap-equipment specialist emphasizes that investors should look at chips and equipment separately. He believes that if a company was prepared to buy equipment before the quake, it will still make the purchase. It will simply be a matter of delayed gratification. "In the equipment business, you have a zero-sum game," Deahna says. "Whatever gets postponed in the near-term will get done [eventually]." With chips it's a little different, Deahna and his colleagues had been looking for a pretty big holiday shopping season. But if chip supplies run tight, then consumer electronics manufacturers may have some difficulty recapturing those sales after the holidays. "The concern in the market right now is that some PC sales earmarked for Christmas might go away," Deahna says. "With this situation in Taiwan, you have potentially taken away some of the upside for the fourth quarter." Consequently, with the cap-equipment guys at least, some fourth-quarter business should spill over into the first quarter of next year. A number of chip and equipment stocks have plunged 10%-20% from their recent highs, and Deahna and his Morgan colleagues maintain they are a bargain. .../ Whole article at interactive.wsj.com