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

To: Sam who wrote (885)	9/11/2000 1:50:21 AM
From: hueyone	Read Replies (1) \| Respond to of 1881

Hello Sam, I suspect the majority of Nor flash coming on line by Intc, AMD, Atmel etcetera that the Web-Fleet Research paper refers to is for higher density flash than the real low density NOR flash that SSTI targets. SSTI says they hardly see these players in their niche anymore and I believe them. These other players do not appear to be able get the same profit margins that SSTI can on low density flash. Ostensibly this is due to the "Superflash advantage". Here is a recent snip from a 8/28/00 CSFB report available at Schwab on PDF format: The majority of the Flash manufacturers in the market, however, are increasingly moving upstream to the higher average selling price (ASP) high-density Flash. There is a large amount of Flash capacity that is being ramped in the market right now by Intel, AMD, STMicroelectronics, Atmel, and a slew of Japanese suppliers. Most of that capacity, however, is dedicated to high density NOR or NAND Flash. SST has positioned itself to benefit from serving this low-density niche and estimates a tripling of unit shipments in 2000 (up from doubling in 1999), coupled with continuing price increases. The company is even being fairly conservative with its price increases in its attempts to firmly entrench itself with its customer base and become the market share leader in the low-density arena. We are raising our September quarter revenue, margin and EPS estimates to $144.4 million, 46% and $0.29, from $129.1, 44.7% and $0.25, respectively. Our new 2000 revenue and EPS estimates increase to $490.5 million and $1.00, respectively, from $456.1 and $0.90, while 2001 increases to $1.0 billion and $1.90 from $850.2 and $1.50, respectively. Gotta love the steady earnings upgrades SSTI is getting!! Best, Huey

To: Sam who wrote (885)	9/11/2000 11:39:04 AM
From: docpaul	Read Replies (1) \| Respond to of 1881

<<But here is another report which suggests that the NOR supply/demand balance will be worse than the NAND balance in two years: Message 14331341 I have no idea which, if either, is right. Or how to judge the situation. I'm afraid that the uncertainty may hold the stock prices of flash companies down a little even in the face of the extremely strong earnings that we will see in October.>> May I give you the perspective of myself, and First Union Securities? Here's an email conversation I had with one of the analysts: <<Really appreciate that. Do you folks have any comments about the perception by a few analysts (in particular the one at www.web-feetresearch.com), that there will be a NOR glut within the next 12 to 18 months? My assumption is that this applies primarily to the larger density NOR made by Intel/AMD, etc?>> Paul, I think your assumptions are correct regarding the supply dynamics of the larger density NOR products (32 Mb, 64 Mb and higher). We think the lower density markets that SSTI operates in will continue to be very tight (i.e. most product shipments placed on allocation) and will be generally unaffected by trends within the larger density markets. Additionally, since most of SSTI's emerging memory products are geared toward application-specific end-markets (~50% of revenues next fiscal year), their revenues will be largely insulated from supply fluctuations in commodity or spot markets. Joey Joseph D. Hiller Associate Analyst; Specialty Semiconductors, Technology First Union Securities joseph.hiller@funb.com; <mailto:joseph.hiller@funb.com;> (804) 782-6629; fax (804) 782-3636