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

To: Math Junkie who wrote (34062)	2/7/2000 9:32:00 AM
From: Lone Star	Read Replies (2) \| Respond to of 70976

In the following, be sure to read Rick Whittington's forecast for the semi market growth. If this comes to pass, well, early retirement for a lot of AMAT investors becomes possible. February 07, 2000 Growth in Communications Industry to Lead Upturn in Semiconductor Arena Competition Among Network Providers Will Keep Moving From Hardware-Centric To Software-Focused, Says Banc of America Securities Analyst SAN FRANCISCO, Feb. 4 /PRNewswire/ via NewsEdge Corporation -- The following is being issued by Banc of America Securities, a member of the National Association of Securities Dealers, CRD number 26091: As competition among major network providers continues to shift from a hardware-centric focus to differentiation through software features, the growth of the communications industry will continue to lead the upturn in the semiconductor industry, according to Banc of America Securities' two senior semiconductor analysts, Rick Whittington and Alex Gauna. (Photo: newscom.com ) Gauna and Whittington made their comments to investors yesterday at the 17th Annual Banc of America Securities Technology Conference, which began Tuesday, February 1 and runs through today at the Ritz Carlton in San Francisco. This year's Tech Week featured 195 presentations from public and private companies representing a broad spectrum of investment opportunities in communications services, computer and peripherals, distribution, networking, semiconductor, software and Internet industries. "Given the pure communications focus of the broadband semiconductor companies on our coverage universe, and the vast work remaining to be done in enriching and extending the power of the Internet, we believe magnificent 1999 results can readily be surpassed in 2000," said Gauna. Gauna told the audience that communications exposure will continue to be a strong investment vehicle for semiconductor investors in 2000. Specifically, Gauna thinks that the first half of 2000 will bring increasing focus on two areas within the broadband semiconductor universe -- access and mobility. As the convergence of voice, data and video takes center stage, Gauna articulated several trends to watch within these two areas, highlighting products associated with network access including DSL, cable modems, digital set-top boxes, T1/E1, T3/E3, ATM, and other commonly employed technologies employed in the home and at work alike. Products and services within the mobility area to which investors should pay attention include concept Web pads, Internet-enabled PDAs, notebook PCs and Wireless Internet handsets, according to Gauna. In addition to mobility, speed has become a critical factor in this new paradigm, according to Gauna. "Massive deployments of high-speed SONET and DWDM (dense wave division multiplexing) networking equipment across the optical transport infrastructure is creating massive broadband voice, data and video delivering capabilities," said Gauna. Gauna highlighted four specific leaders defining the broadband semiconductor market: EXECUTION: On the residential side of the market, he believes there is no better-positioned company than Broadcom (Nasdaq: BRCM, $311.25, Strong Buy)* as we enter 2000. Gauna believes that Broadcom's premium is warranted given the instrumental role the company is playing in the evolution of next generation Internet communications. FULL SYSTEMS KNOWLEDGE: PMC Sierra (Nasdaq: PMCS, $246.00, Strong Buy), a company introducing complete chip set solutions as opposed to individual ICs, also provides investors with a significant opportunity, according to Gauna. CLEAR TECHNOLOGY ROADMAP: As the fastest growing semiconductor supplier to optical networking companies, investors should continue to take notice of Applied Micro Circuits Corp. (Nasdaq: AMCC, $186.25, Strong Buy) ALL OF THE ABOVE: As the largest purely communications-focused broadband semiconductor company, Conexant (Nasdaq: CNXT, $94.38, Strong Buy)* is increasingly demonstrating execution, full systems knowledge, and a brilliant technology roadmap across a compelling portfolio of wireless, broadband access, telecom and optical transport product lines. Finally, in his remarks, Gauna compared the growth of hardware companies to that of Internet software companies, noting that the average growth rates are comparable. Furthermore, the broadband semiconductor companies in the Banc of America Securities universe are actually more profitable than those within the firm's Internet software universe; yet, the market continues to favor software companies as more attractive investments. The relative valuations of these software companies, with an expected 2001 price-to-earnings multiple of 308x, versus those of the broadband semiconductor universe, with an expected 2001 P/E multiple of 134x, suggest a misunderstanding of the value proposition, Gauna says. Rick Whittington presented some macro themes to investors following Gauna's broadband-specific remarks. "The message is loud and clear: this is THE best environment any of the semiconductor companies have ever seen," said Whittington. "We are impressed with the breadth of end markets, regions and products experiencing sharp growth. January was universally better than had been expected and February is already off to a fast start," said Whittington. Whittington's forecasts 35% growth in 2000 over 1999 and 40% for 2001, bringing the industry to the magic $300 billion mark by 2001, he predicts. Furthermore, Whittington projects additional 40% sequential growth years in 2002 and 2003, resulting in nearly $600 billion in annual chip sales three years from now, this off a base of $160 billion in 1999. "We strongly believe that semiconductor stocks are still under-appreciated and will continue to materially outpace consensus estimates," said Whittington. "These stocks in general remain outstanding investment values," he noted. He added that analog and communications stocks are particularly attractive, with the market cap of the analog market totaling $220 billion and the pure-play communications IC market-cap at $90 billion versus the $750 billion market cap of the classic digital semiconductor universe. Banc of America Securities LLC (BAS), a subsidiary of Bank of America Corporation, is a full-service investment bank and brokerage firm. With principal offices in San Francisco, New York City and Charlotte, BAS employs more than 4,000 associates in offices around the country, and with affiliates, offers capabilities worldwide. Bank of America Corporation, with $633 billion in total assets, is the holding company for the largest bank in the United States, with operations in 21 states and the District of Columbia. *Banc of America Securities LLC currently maintains a market in AMCC, BRCM, CNXT, and PMCS. Banc of America Securities LLC was co-manager of a public offering for AMCC in the last three years. SOURCE Banc of America Securities /CONTACT: Jennifer A. Smith of Banc of Securities, 415-913-5968, or jasmith@bofasecurities.com/ /Photo: newscom.com AP Archive: photoarchive.ap.org PRN Photo Desk, 888-776-6555 or 201-369-3467/ /Company News On-Call: prnewswire.com or fax, 800-758-5804, ext. 137001/ /Web site: bofasecurities.com (BRCM PMCS AMCC CNXT) [02-04-00 at 16:08 EDT, PR Newswire, File: p0204160.800] Entire contents (C) 2000 by Individual, Inc., 8 New England Executive Park West, Burlington, MA 01803

To: Math Junkie who wrote (34062)	2/7/2000 9:33:00 AM
From: Lone Star	Respond to of 70976

Also, there are two more analyst get together starring tech, I believe both this week. Goldman Sacs and Merrill Lynch. Look for press releases.

To: Math Junkie who wrote (34062)	2/7/2000 10:58:00 AM
From: Proud_Infidel	Respond to of 70976

Fabless suppliers face delays, price hikes from foundries By Mark LaPedus and Macabe Keliher Electronic Buyers' News (02/07/00, 09:53:10 AM EDT) TAIPEI, Taiwan-- Chip suppliers that rely on foundry services to meet customer demand are in for a rude awakening this year: lack of capacity, shipment delays, and price hikes. What's more, semiconductor companies--fabless suppliers as well as those that have outsourced from their captive manufacturing bases--may pass rising costs along to their OEM customers, according to some vendors. Leading wafer foundries were already scrambling to meet demand in 1999, and are now reporting that they are booked solid for the first half of this year, with probable wafer shortages lingering until at least 2002. The shortages are said to be pushing out delivery times by a month or more. Given the environment, several foundries are considering a new round of price hikes for select chip makers, particularly smaller companies with little or no market leverage. But larger chip makers are not immune to the situation and eventually may face price increases of their own. The outlook for foundry vendors looks bright, although a shortage of wafers is mounting despite the massive buildup of fab capacity in the industry, according to analyst Joanne Itow, who tracks the foundry segment at Semico Research Corp. in Scottsdale, Ariz. "Chip makers are concerned," Itow said. "Foundry capacity is tight right now. In 2001, we expect shortages of 0.25-micron capacity. 0.18-micron capacity is OK now, but I also expect shortages for this technology in 2001." Itow also predicts that the average selling price for a wafer based on five-layer, 0.18-micron process technology will jump from $2,800 per unit now to $3,000 by the third quarter. Even lagging-edge wafers, which usually experience price declines in normal cycles, are not budging due to the capacity crunch, she said. ASPs for five-layer, 0.25- to 0.35-micron wafers were supposed to drop in the first half of 2000, but prices are now projected to stabilize or increase, according to Itow. In fact, she said, a 0.25-micron wafer will now hover at about $2,000 per unit, while a 0.35-micron wafer will sell for $1,200 to $1,460. "Normally, we see price declines, especially for older technology," Itow said. "But I think we'll see price increases in the second half of 2000.'' The pressure to raise prices is already being felt around the industry. Taiwan's Realtek Semiconductor Corp., a supplier of LAN chips, said discussions with wafer- foundry giant United Microelectronics Corp. regarding possible price increases could force the company to up tags for its customers. "UMC's prices are threatening to go up for us, and the effects will be felt," said a spokesman at Realtek in Hsinchu. "Given the current supply situation, we may have to pass along the price increases to our customers, allowing our profit margins to remain stable." UMC's foundry rival-Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC)-is also considering a plan to raise Realtek's wafer prices in the near future, the spokesman said. Industry sources said that other fabless-IC design houses, including Via Technologies Inc. and Silicon Integrated Systems Corp., could see wafer price increases as well. Representatives from the companies were unavailable for comment before press time. Though they stopped short of confirming a price hike, leading foundry providers acknowledged that ASPs are gradually increasing as they move their fabs to leading-edge process technologies. "The trend is for prices to go up in a tight demand situation, but there's no across-the-board increase," said a spokesman at Hsinchu-based UMC. "[Wafer] prices continue to firm up in the marketplace," said Ron Norris, acting president of TSMC's U.S. subsidiary in San Jose, in a recent conference call to analysts. "As we shift toward higher-end process technology, I expect that to be a major contributor" to possible increases in wafer prices. "We have been successful in getting more value for our wafers, [and] that has resulted in higher prices," said Kevin Meyer, vice president of business development at Singapore's Chartered Semiconductor Manufacturing Pte. Ltd. "We have successfully transitioned some customers to richer technology mixes. As older contracts have expired, new contract pricing reflects current market value. New customers have been developed at current market pricing." The industry's other major foundry provider, IBM Microelectronics, declined to comment on its pricing strategy. If rising prices weren't enough, chip makers say they are also coping with shipment delays due to the industrywide capacity crunch. It typically takes 30 days for a foundry to manufacture, package, assemble, and test a chip, according to a spokesman at Taiwan's Advanced Semiconductor Engineering Inc., the world's second-largest IC-assembly house. However, cycle times have been pushed out now to nearly 60 days, the ASE spokesman observed. "It's not our fault," he said. "The problem is the capacity issues within the foundries."