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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (3943)	1/31/2000 1:09:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 5867

Texas Instruments CEO Says PC Era Ending TOKYO (Reuters) - Wireless Internet devices are now replacing personal computers as the driving force in the electronics industry, Texas Instruments' top executive said on Monday. Tom Engibous, chief executive officer of Texas Instruments, which is investing heavily in computer chips used in mobile phones, said demand for wireless Internet devices will soar when they are permanently linked to the Internet via broadband networks. Broadband frequencies allow high-capacity data transmission. ''Wireless Internet devices will not only capture some existing PC applications but introduce brand new applications that the desk-top PC has no way to handle today,' Engibous told a Tokyo seminar on the company's strategy. ''I think the availability of a wireless device that is online all the time with broadband data capability...offers the possibility of applications that Silicon Valley' is just beginning to dream about, he added. With next-generation mobile phone services, users will be able to surf the Web, check and respond to e-mail, conduct videoconferences and use new mobile services such as e-commerce, he said. Next-generation mobile phone services will be offered in Japan beginning in the spring of 2001, and later in other parts of the world. TI, the number one supplier of computer chips known as Digital Signal Processors (DSP) used in cell phones and other communications devices, earlier this month announced a 71 percent jump in its fourth-quarter net income, aided by strong growth in mobile phones. The Texas-based company has sold its loss-making dynamic random access memory (DRAM) chip business, focusing its resources on more stable and value-oriented DSP and analog chips. It now holds about 47 percent of the world's programmable DSP market. That market is expected to grow 30 percent annually over the next five years, according to the research firm Forward Concepts. Besides wireless handsets, Engibous said he sees large demand for DSP chips for use in modems providing broadband connectivity at home, and new consumer electronics products such as digital cameras and Internet audio devices.

To: Cary Salsberg who wrote (3943)	2/10/2000 1:16:00 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 5867

Korean gov't reports chip exports to surpass $23B in 2000 By Jack Robertson Electronic Buyers' News (02/10/00, 10:41:53 AM EDT) South Korean semiconductor exports are expected to hit a record $23.5 billion this year, surpassing the old mark of $22.1 billion reached in 1995, according to government estimates. The Ministry of Commerce, Industry, and Energy said chip exports from the country in 1999 totaled $20.3 billion, after falling to $17 billion in 1998 due to the precipitous decline in global DRAM prices. The ministry estimated that semiconductor imports into Korea last year were $16 billion, up 33% over the previous year. Officials attributed the sharp rise in imports to heavy demand for microprocessors and chips for telecommunications applications. Imports of flash memory and SDRAM almost tripled to $800 million, as domestic manufacturers were unable to meet demand coming from Korean OEMs.

To: Cary Salsberg who wrote (3943)	2/12/2000 6:01:00 PM
From: Jong Hyun Yoo	Respond to of 5867

Hi, Cary. Sorry for the late response. I have been quite busy with the school work and have not been in the thread lately. You have raised a couple of questions some time ago with respect to 1) possible peak earning in the current cycle 2) justification behind my assumption of PE 32 when historically in the last cycle, equipment companies had PE of low 20's.. So here goes my humble opinions: First, with respect to peak earning in the current cycle, I believe that the upturn in the semiconductor business will last till year 2004 or 2005. Historically, the cycle had a periodicity of about 5 years. Considering current upturn began in early part of the year 1999, forecast of 2004 as a peak year for the upturn is consistent with the historical trend. However, we cannot rule out the fact that the upturn could last beyond this estimate. I believe this upturn is fundamentally different from the previous ones. In previous up cycles, emergence of roughly one product was a main driver for the increase demand in comsumption of semiconductor. For instance, in the last upturn ,which lasted till 1995-1996, the emergence of PC as a common household product created demand for the semiconductor. In anticipation of increased demand in PC, DRAM, microprocessor, and PC peripheral chip companies ramp up the production volume and when the PC consumption did not turn out to be as strong as forecasted in 1996 and demand even tailed off due to depressed economy conditions in Asia, the demand for the ships took a nose dive and severe downturn in the semiconductor and equipment market resulted. What is fundamentally different about the current up cycle is the fact that demand for the semiconductor is created by the emergence of multiple products. The semiconductor products that is related to deployment of the internet infastructure, wireless communications, new consumer electronics such as HDTV, MP3 players, DVD players, ect and web appliances are simultaneously driving the demand for the chips. Since deployment of the internet structure is not going to be over in a couple of years, this upturn has a good possibility of lasting beyond 2003-2004. Even if the demand in one segment of the business softens, the demand in the other area can pick up the slack so that overall demand may continue to go up for sometime. Given this favorable business climate, semiconductor equipment business will continue to thrive. Despite recent raise in the estimate of EPS for LRCX, I believe that there continues to be upside potential. If LRCX is successful in snatching away some market share from AMAT and TEL, given the tremendous operating leverage that LRCX has, LRCX can achieve EPS of more than $5 by just returning to peak revenue level it has reached during the last up cycle, 1.2 billion. During the current upturn, I believe LRCX can reach revenue number exceeding 2.2 billion without increasing manufacturing floor space. Improved operational and manufacturing efficiencies can enable LRCX to achieve EPS of $9 to even $10 sometime in this up cycle. In the near term, there are many expansion plans by major chip makers to add capacity ( INTEL, Motorola, Samsung, Hyundai, and Of course, Taiwanese foundaries). The expansion plan is to meet the current existing demand, not to meet the anticipated demand in the future. Thus, supply and demand equation remains very favorable. The situation is still demand-driven. Added capacity at 0.18 um level and new technological driver such as copper and low-K will create need for more equipments. This will be coupled with transition to 300 mm standard late this yr. The situation is indeed bullish at least for now. The question of appropriate PE to value the stock should depend on the business condition. If you look at the last peak, equipment companies were receiving a multiple of about mid twenties. AMAT, a leader in the industry, were value a little bit higher towards high twenties in 96 just before the market took a nose dive based on next year's expected earning. I am contending that LRCX still does not have the multiple that AMAT is getting but will so as LRCX will operational performance that is comparable to AMAT. Also current industry condition and outlook is much more promising than those in the past cycle so that a little bit upward revised PE of low thirties are quite reasonable. LRCX is a company with tremendous EPS growth potential. When market awards the company with a little bit more aggressive multiple as the company will demonstrate its success in improving operational and manufacturing efficiencies, you will continue to see LRCX soar to new high's. In my opinion, LRCX is undervalued at the current level compared to AMAT based on EPS growth outlook. Good luck to all the longs here.