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Technology Stocks : SILICON STORAGE SSTI Flash Mem -- Ignore unavailable to you. Want to Upgrade?

To: Dan Spillane who wrote (648)	7/10/2000 6:07:40 PM
From: Mr. Miller	Read Replies (1) \| Respond to of 1881

"Severe shortage" of foundry capacity seen by 2003, despite rapid expansion... Semiconductor Business News (07/10/00, 03:51:27 PM EDT) semibiznews.com PHOENIX-Even though dedicated foundries are expected to more than double their capacity over the next couple of years, they could end up with a "severe shortage" of capacity by 2003. And it could come even sooner in some product categories, according to a new study by Semico Research Corp. here. The Phoenix market researcher estimates that dedicated foundries plan to increase their global wafer capacity by 50% this year and another 50% by 2002. Historically, dedicated foundries get most of their business from the fabless semiconductor companies. Because of a proliferation of these fabless suppliers, foundries such as Taiwan Semiconductor Manufacturing Co., experienced nearly a 10-fold growth from 1991 to 1999. This growth is continuing, Semico points out. Wafer demand from fabless companies isgrowing more than 40% so far this year over 1999. Companies such as Altera, Xilinx, Sandisk, and Silicon Storage Technologies are experiencing explosive growth due to growing digital consumer and communications markets, the market researcher points out. Despite this growth, fabless companies still represent less than 20% of the total global semiconductor market, Semico points out. Today, the foundries are getting most of their growth from the top tier chip companies, the so-called integrated device manufacturers (IDMs). A good many of these IDMs-including Lucent Technologies, LSI Logic, Motorola, and National Semiconductor-increasingly are making foundries a key part of their manufacturing strategies. They are doing this to reduce their own exposure to risk, increase their manufacturing flexibility, and even to keep up with leading edge process technology. Also, after cutting back their capital spending during the 1998 downturn, many companies are now turning to foundries to make up for shortages in capacity for certain booming products. As Semico points out, as the overall industry gears up for a year of more than 30% growth, the increased use of foundries is becoming a need rather than just an option.

To: Dan Spillane who wrote (648)	7/13/2000 5:40:31 PM
From: Mr. Miller	Respond to of 1881

Even if there is fear that flash will become a commodity, why would large foundries be putting so much effort into it? There has to be a huge market no matter what happens to the prices or its status, so who gives a sh@t if it will EVENTUALLY become a commodity. You gonna sell SSTI now for what MIGHT be in a few years? Heck, any semi is prone to be in a sector that produces chips that could be commoditized. The bottom line is that there will be a LONG standing market for flash memory chips and what will be key for SSTI is whether or not they keep getting foundry agreements(ie. other people making chips using their technology) which bring money from many angles. They won't be able to compete in production(we all know that), but they sure as all hell could license the smack out of this technology since it keeps costs down and allows the big boys to make big bucks with this "eventual commodity." That's what is key here. SSTI has the patents on how to make this "stuff" efficiently while not compromising quality, which is why so many so far have licensed it. In addition, SSTI is producing it as much as they can. There isn't going to be a let down in the need for flash memory as the world moves for wireless devices and appliances. These chips are NOT like those made for the ancient PCs. This is a whole new era and SSTI is a pure play in it. Even if it becomes a commodity in a few years, where's SSTI going before then, and then after? Before, growth will still be tremendous. Yeh even is targetting a $billion year in revenues for the FY 2001. That's $1 billion in revenues. This seems to me to be one of the best stocks to own in the semiconductor industry as it hasn't gotten ahead of itself in value as others have and their growth rate commands more. So when is this going to be a commodity? How about asking that question to Qualcom, Broadcom, RF MicroDevices, Vitesse, PMC-Sierra, or any other semi. They could all face the same fate. SSTI is very well positioned to prosper handsomely as the demand for wireless devices needing flash memory explodes.