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Technology Stocks : RF Micro Devices (RFMD) -- Ignore unavailable to you. Want to Upgrade?

To: robert duke who wrote (963)	10/9/1999 3:01:00 AM
From: Cesare J Marini	Read Replies (2) \| Respond to of 4849

Days like today are great put-selling days. Almost like having a license to print money. Sold NOV 45s when the stock was at 47 and change.

To: robert duke who wrote (963)	10/9/1999 8:02:00 AM
From: dennis michael patterson	Read Replies (1) \| Respond to of 4849

robert, I am delighted you beat me! I think we got caught in this hi fn thing today. I am not concerned. Although Rfmd did not come back at the end of the day as it usually does. I'm holding

To: robert duke who wrote (963)	10/10/1999 7:57:00 AM
From: dennis michael patterson	Respond to of 4849

Communications Chip Stocks Face Sudden Downturn By Marcy Burstiner Staff Reporter 10/8/99 7:33 PM ET SAN FRANCISCO -- Fund managers with investments in communications chip stocks have been living easy for the past year. Stocks like PMC-Sierra (PMCS:Nasdaq), Applied Micro Circuits (AMCC:Nasdaq) and RF Micro Devices (RFMD:Nasdaq) have seemed untouchable. So what a shock to find them plunging Friday: PMCS closed down 10%, AMCC dropped 9% and RFMD was down 4%. The stocks started tumbling after network chipmaker hi/fn (HIFN:Nasdaq) said Thursday that two major customers, Lucent's (LU:NYSE) Ascend unit and Quantum, cut orders for the current quarter. The news ignited concern that communication companies may have built up their inventories in preparation for Y2K and that sales for chip companies may slow in the coming months. After Steep Ride Up, Communications Chips Plunge Company Friday close price % drop at interday low YTD % change at Friday's close PMC-Sierra 89 1/2 14.8 183 Vitesse 82 3/8 13.3 81 Applied Micro Circuits 75 1/2 16.5 327 RF Micro 50 3/8 8.9 335 TranSwitch 58 13.25 123 Conexant 75 12.2 298 Source: Baseline, ILX. "I think there are legitimate issues to be concerned about," says Salomon Smith Barney chip analyst Clark Westmont. For one, delivery times for chips have stretched out in the past few months. Generally when that happens, customers sock away inventory to ensure sufficient supply. Now, worries about possible Y2K problems may have caused customers to sock away even more supply. "We won't be able to quantify the problem in the next several months." Fund managers who have bought communications chip stocks for their long-term growth prospects are staying put. Still, Friday's selloff was enough to dampen even the cheerful spirit of Bill Keithler, portfolio manager of Invesco Technology Fund, which holds several communications chip stocks, including Applied Micro, PMC-Sierra, Vitesse (VTSS:Nasdaq) and Conexant (CNXT:Nasdaq). "If you own hi/fn, a little panic is justifiable," Keithler says. "But you really won't see any impact on Applied Micro, RF Micro, Galileo Technology (GALT:Nasdaq) or PMC-Sierra." Rather than selling, Keithler is looking for a chance to buy more. "If we get another panic run, we would consider adding to our positions," he says. BancBoston Robertson Stephens chip analyst Arun Veerappan, who triggered the hi/fn plunge with a report Thursday, says he thinks sellers of other chip shares are acting rashly. He expects to see great financial performances from most of the companies that sell networking and communications chips. "PMC-Sierra will have a great quarter and great outlook," says Veerappan, who has a strong buy rating on the stock. (BancBoston Robertson Stephens hasn't done any underwriting for PMC-Sierra.) Westmont, too, says the possible problems from inventory buildup are short-term concerns only. As the markets for communications chip customers keep growing, the demand for the chips that go into every networking box and cellular phone also increases. "This is an incredibly attractive area," he says. "The fundamentals remain intact." But a little caution is healthy given how high the stocks have risen in a short period of time. "We've been in a period of incredible greed," Westmont says. "Maybe it's fear's time for a while."