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

To: Paul Lee who wrote (8346)	9/6/2000 9:45:09 AM
From: DJBEINO	Read Replies (2) \| Respond to of 9582

<getting killed on the MU downgrade :( >> MU biz is mainly in PC's unlike ALSC. MU biz in in 64M dram unlike alsc which is in 4 & 16m DRAM. UMC is doing GREAT.NO NEED TO PANIC

To: Paul Lee who wrote (8346)	9/7/2000 9:22:13 AM
From: DJBEINO	Respond to of 9582

Taiwan Chipmakers' Profits Soar, But Shares Stagnate By Michael Kramer TAIPEI (Reuters) - Taiwan's semiconductor firms turned in sterling first-half performances but share prices have scarcely budged since the year began -- leaving analysts baffled but hopeful the fundamentals will shine through. The chipmakers are victims of domestic political concerns as well as a few bumps in the current semiconductor upturn and these factors have obscured the strength of these companies, most of which more than doubled their first-half profits from the same period last year, analysts said. The market's top big-cap, Taiwan Semiconductor Manufacturing Co put in a performance typical of most of the island's chipmakers: first half net profits rose 133 percent year-on-year to T$23.58 billion (US$760.64 million). But shares in TSMC, Taiwan's bluest blue chip, are down 3.8 percent in the year 2000 to date. The issue ended T$5.50 lower at T$125.50 on Thursday. TSMC has outperformed the Taipei market as a whole. The TAIEX is down 12 percent for the year, dogged by worries over a new administration's tensions with mainland China and an opposition-dominated parliament. However, TSMC's Taiwan share performance compares much less favorably with the 50.1 percent rise in the Philadelphia Semiconductor Index over the same period. Mysterious Valuations TSMC's New York-listed American depository receipts now carry a 50 percent premium over their Taiwan-traded counterparts, a phenomenon Merrill Lynch Asia technology analyst Dan Heyler called a mystery. ``It's a sign of an inefficient market,'' Heyler told Reuters. ``There's the country sentiment and the country factor playing into that.'' Jason Tuan, head of research at Taiwan Securities Investment Trust, agreed. ``The earnings all met expectations. The market did not.'' But beyond Taiwan's local worries, analysts said global investors have been downgrading enthusiastic valuations that hovered around 35-40 times earnings for semiconductor shares at the beginning of 2000, fearing slower growth for the sector. ``Now looking into 2001, the growth momentum may not be as strong as this year. There's a massive downward pressure on P/E (price-to-earnings) multiples,'' said Liu Chitung, research chief at SBC Warburg Dillon Read in Taipei. For example, TSMC's arch-rival in the made-to-order chip foundry business, United Microelectronics (UMC) now trades at a measly 14.8 times consensus estimates for 2000 earnings per share, down from an already modest 20 times earlier in the year. UMC closed T$3.00 at T$77.00 on Thursday. Liu said he expected growth in the world semiconductor industry to slow to 40 percent in 2001 compared with over 200 percent this year. Slower, But Above Average ``It's still far, far above the average,'' Liu added. ``Once investors are willing to recognize that 40 percent is a very good number already, then I think the P/E multiples will expand and shares price will outperform as well.'' Few Taiwan-based analysts agree with a Salomon Smith Barney report in early July that saw signs of a ``trend reversal'' in the semiconductor upturn, which most industry insiders expect to peak in 2003. But they add it will not be a smooth ride to the top. ``Semiconductors are going to go through mini-cycles, not rising all the way from 1998 to 2003 like everybody thinks,'' said Tuan of Taiwan Securities Investment Trust. ``I think there needs to be a rest in the middle.'' Merrill's Heyler said a ``mid-cycle correction'' caused by fears of oversupply and slower earnings growth was already over and semiconductor shares were poised to rise again as chip fabrication plants get pushed to capacity and prices rise. ``We're looking for that to expand in the third quarter and share price, at some point, has to respond to this phenomenon,'' he said. ``I don't think that's priced into the stock today.'' dailynews.yahoo.com