Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: DJBEINO who wrote (8067)	8/2/2000 9:34:13 AM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Mosel remains upbeat despite selloff (same for ALSC) SILVER LINING: The DRAM maker's price makes it an attractive opportunity for long-term investors By Thomas Ker CONTRIBUTING REPORTER The continued lack of confidence in the Taiwan stock market led to a late sell-off of shares in DRAM maker Mosel Vitelic Inc just before the market closed yesterday. The sell-off followed a strong market opening following NASDAQ's recovery and strong first half earnings reported by TSMC on Monday. Mosel Vitelic's stock is now considered cheap, and is being viewed as an attractive long-term investment by securities analysts. Mosel Vitelic designs, manufactures and markets main memory DRAMs, buffer memory DRAMs, SRAMs and flash memories. It is reportedly Taiwan's fourth-largest chipmaker by sales. Although Mosel's stock price is unlikely to rebound in the short-term, its long-term outlook remains strong, said Alfred Ying, analyst at Primasia Securities. The stock closed yesterday at NT$55.5, down NT$2 for the day, on turnover of 24.2 million stocks, the highest in the TAIEX yesterday. The stock reached a high of NT$93.5 for the year at the beginning of April, but has being falling ever since. "In the short term, foreign investors will reduce holdings in semiconductors," Ying said. Concerns about a possible rise in interest rates in the US will also dampen buying sentiment, he said. Following Mosel Vitelic down in the market yesterday were chipmakers TSMC and DRAM-maker Winbond. Both stocks likewise opened strongly, only to fall late in the session. "Investors are selling stocks, and staying on the sideline," said Chris Hsieh, securities analyst at Nomura International Taipei. In the longer term, the outlook is not quite so gloomy. Anticipated rises in DRAM prices from growing demand and possible DRAM shortages at the end of the third quarter should benefit Mosel Vitelic's revenue, and subsequently, its stock price. "The average DRAM 64Mb spot price should rise above US$10," said Hsieh. The benchmark 64Mb DRAM spot price was trading at US$8.5 last Friday, according to the American IC Exchange. More importantly, the sales of DRAM at spot price accounts for only 10 percent of sales, Hsieh said. "Ninety percent is traded on contract, and the contract price is now close to the spot price," he said. Rising prices and shortages should benefit DRAM makers, and particularly Mosel Vitelic Inc. "The Mosel group has the lowest DRAM cost in Taiwan," Hsieh said. A shortage of DRAM and a subsequent price rise would therefore hike its average value price, he said. "It will enjoy a margin growing faster than anyone else in Taiwan," he said. The positive long-term outlook is shared by Primasia's Ying, who believes the share price could rise to NT$70 to NT$80 in September. An analysis report written by GMS Investment Consulting Co at the end of June predicted the stock would rise to at least NT$110 by the end of the year and anticipated an earnings per share of NT$4.5, higher the NT$1.67 EPS reported for 1999. Last week, Mosel Vitelic Inc was also reported to be looking for ventures with Japanese, US, or Taiwanese partners to make flat panel display control chips. Such a venture would likely boost the company's prospects, according to Nomura's Hsieh. However, news about the venture has dried up since it was reported, he said. In the first half of the year, Mosel Vitelic's revenue was reportedly NT$14.4 billion, a 92.2 percent rise from the same period last year. The report by GMS Investment Consulting predicts revenue for the year of over NT$39 billion. The company reported revenues of NT$19.8 billion for 1999. taipeitimes.com