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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: FJB who wrote (12767)	7/10/2000 7:48:15 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 60323

Robert, I fear you forgot #3: "(3)Peak years in capital spending have correlated closely with 1984 (64% growth of capital spending), 1988 (53%), 1995 (71%), and a short peak in 1997 (32%)." With this in mind, while you may not agree with the inference, it is a logical inference.

To: FJB who wrote (12767)	7/10/2000 9:04:51 PM
From: Ausdauer	Respond to of 60323

That SSB report. I read that SSB report and had the following comments. 1) The authors of the SSB report didn't "downgrade the whole semiconductor market" at all. It offered some words of caution about macro- and microeconomic trends and then singled out 4 particular stocks where they had previously issued ratings and price targets. The report was a heads-up on these particular companies, but also hinted that other companies may be at risk. The unique features of the companies highlighted were the link to the cell phone market, increasing customer inventories on the back of drastic shortfalls in supply (and correspondingly long lead times), and a weighting toward commodity products defined within the article. 2) Contracting lead times and price declines on the spot market were felt to be harbingers of rough weather ahead. As far as SanDisk is concerned we have not discussed lead times nor have we discussed spot prices on ultra-high density flash. I think these would be important indicators to follow in the future. 3) Most semiconductor cycles are defined at the peak by overcapacity. No attempt was made in this article to correlate prior peaks to correlate with products driving demand. The sale of PC's, for example, could be compared with anticipated industry wide demand from newer (nascent) Post-PC markets which are not limited to cell phones. Without the demand aspect of the market more clearly defined I feel at least half of the argument has been neglected. 4) Not every deep nadir in wafer equipment sales actually correlated to peaks in semiconductor sales. 1992 is one exception to the rule. No attempt was made to explain this. 5) Not every tailing off ("rollover") of unit sales heralded a sharp subsequent decline. March of 1994 is a perfect example. 6) Wafer fab sales for 2000 are projected to increase dramatically to nearly $30 billion (from $20 billion). This seems incongruent with the statement that we are currently at the peak (as Robert noted earlier this evening). 7) Flash memory is lumped into one big bag and even compared to capacitors Their demise is predicated on a tapering off of cell phone demand. Cell phone demand was grossly overestimated by some accounts. I don't think any of this information is relevant to SanDisk. 8) A 12 month or 18 month lead time is a "pipe dream". I guess that means by the time you get there the market has found alternatives or capacity is built up by competitors. I thought this statement was a bit confusing and even adolescent. How old are the guys writing this? 9) AMD is criticized in part because of their flash business. "Some brokers we have spoke with are beginning to see declining spot market prices in high and low density Flash, though we do not believe the trend is widespread." They are suggesting here that AMD produces high density flash. I think any future discussions need to clarify the densities more precisely. I consider FlashVision's products to be ultra-high density in this case. 10) The final section is again dedicated to 4 individual companies, not the industry as a whole although the cautionary tone is implied. Ausdauer