(PR NEWSWIRE) The Wall Street Transcript Publishes Semiconductor Industry
The Wall Street Transcript Publishes Semiconductor Industry Report
NEW YORK, Nov. 30 /PRNewswire/ -- Three leading analysts and
six Semiconductor CEOs examine the Semiconductor sector in the latest issue of
The Wall Street Transcript (212-952-7433) or twst.com
In a vital review of this sector for investors and industry professionals,
this valuable 56-page report features:
1) Semiconductor Industry -- In an in-depth Analyst Roundtable
(9,000 words), Jonathan Joseph of Salomon Smith Barney, Daniel Myers of Lehman
Brothers and Joseph Osha of Merrill Lynch examine inventory levels, pricing
trends, Taiwan earthquake impact, chip shortages, capacity additions,
Japan/Korea market outlook, capital spending trends, System-on-a-chip market,
stock valuations, the outlook for the sector and specific stock
recommendations.
Clearly, this year is a very, very good year compared to 1998, Myers
recounts, "I think that in 1999 we're going to see it be solidly in the
mid-double-digits for a growth rate. We're having a classic, cyclical upturn
in the semiconductor industry."
For a free interview excerpt in which Myers explains why he feels there is
more time in the up-cycle for semiconductors see
archive.twst.com
The first thing that you have to look for here is really a supply-led,
constraint-led bump in pricing which makes it possible to generate revenues,
Osha asserts. "But the second thing that you look at is the longer-term
seismic shifts in demand patterns. What we're currently seeing here is the
shift away from PCs toward communications as growth drivers. But the reason
that PMC-Sierra (Nasdaq: PMCS) and Vitesse Semiconductor (Nasdaq: VTSS), have
done so well over the last 12 months has as much to do with the latter as the
former. Investors get the two tangled up, but one doesn't necessarily have a
lot to do with the other. The communication story is going to last a lot
longer than this cyclical upturn will."
Nobody really knows how much inventory is out there because of all the
juggling and the off-balance-sheet recording, Joseph states, "Rich Templeton,
the head of semiconductors at Texas Instruments (NYSE: TXN), recently put it
quite honestly, 'We do not really know how much inventory there is in the
channel. If demand remains strong, it is not a problem. If demand weakens,
it becomes a problem.'"
So-called "system on a chip" is really an ASIC by any other name, Joseph
declares, "Though the chip is no different, the economics for manufacturers
are better. The move towards SOC is not something new in the industry. But
it does allow the actual silicon suppliers to capture more of the value, so
they're able to gain better profits. Beneficiaries here are Texas
Instruments, STMicroelectronics (NYSE: STM), and to some degree LSI Logic
(NYSE: LSI)."
The beauty of the semiconductor market today is the same thing that has
been happening for the last 40 years and that is -- if you've got a better
mousetrap -- it doesn't matter how big you are, Joseph concludes,
"Particularly in areas that are screening for performance and where the system
OEMs need their high-performance components to differentiate their systems
from their competitors', if you've got a better mousetrap, you're going to
sell a lot of it and pretty quickly. We've seen that in the case of a lot of
these small communications companies that are now growing over 100% annually;
PMC-Sierra, Applied Microcircuits Corp. (Nasdaq: AMCC) and Broadcom
(Nasdaq: BRCM)."
Because of the fact that most of the new companies are fabless companies,
Myers states, "They all use TSMC (NYSE: TSM) or United Microelectronics
(TAI:2303.TW), or Chartered (Nasdaq: CHRT), which are recognized foundries, so
there are no manufacturing advantages."
For a list of the extensive collection of Semiconductor analyst and CEO
interviews available see twst.com
Again, if you can build a better mousetrap, in general, you can sell it,
Osha says. "We've seen some small companies, and one that I'm sure is near
and dear to Dan's (Myers) heart is Maker Communications (Nasdaq: MAKR).
That's a very small company, but in the narrow niche that they address, they
are competitive with the best companies in the world."
The panel goes on to offer recommendations about which sector stocks are |
