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To: Madharry who wrote (8493)	9/19/2000 3:06:46 PM
From: DJBEINO	Respond to of 9582

Micron Technology ( MU $58 1/2 ) (bear stearn & HQ) Buy Price Target: $140 Update MarketCap: $33 Billion Index: NYSE Composite, S&P 500, NYSE Composite Recent DRAM spot price declines have caused MU to weaken due to concerns that excess DRAM supply could lead to significant additional price declines. We think this concern is misplaced, and that spot market prices do not accurately reflect overall DRAM market supply conditions. 64M DRAM spot prices continued to slide last week and reached prices in the $6.60 - $6.80 range in Asia by the end of the week. However, 128M DRAM spot prices command a slight premium at $16 - $17, and contract prices remain stable at $8.00 - $8.30 for 64M and $16 - $17 for 128M parts. MU is selling nearly all of its DRAM to tier 1 OEMs on a contract basis, with an estimated 1-2% of its output selling into the spot market. MU indicates that over 70% of wafer starts are for 128M DRAM, which is selling at a slight premium to 64M devices. We think MU's low cost basis should lead to strong margin and earnings over the next several quarters. We think that aggregate DRAM supply is lagging demand based on weak capital spending in the last few years. Strong total DRAM demand for PCs, servers, and new digital consumer products should result in modest supply shortages over the next 12-18 months, providing better prices stability than we have seen in the last few years. We believe recent spot market price activity is a result of relatively small inventory liquidation from second and third tier OEMs reacting to a weaker back-to-school build cycle in the August time frame. We expect normal Xmas seasonal strength to stabilize spot prices in October, taking pressure off of the stock. We reiterate our Buy but acknowledge the likely weakness in the stock until spot pricing stabilizes. Bear Stearns: 8/00E $2.23; Q4 $0.92 8/01E $5.60 Consensus: 8/00E $2.30; Q4 $0.95 8/01E $5.00 Consensus Rating: 1.5 (Last Updated 9/18 ) ++++++++++++++++++ Intel Corporation ( INTC $55 13/16 ) Buy Price Target: $90 Business Remains Solid, Reiterate Buy MarketCap: $374.7 Billion Index: Dow Jones Industrial, NASDAQ 100, S&P 500 INTC's stock has weakened over concerns about the health of the PC market. We believe the PC market is healthy, and should experience normal strong seasonal demand in Q4, which should in turn drive strong unit and revenue growth for Intel's microprocessor business. The PC market apparently fell slightly short of expectations for the back-to-school season. We think the shortfall was likely modest, and was probably due to shortages of low-end microprocessors and delays in the launch of Windows Me (Millennium edition). We expect a strong Xmas quarter. INTCl has made some progress in alleviating supply constraints for its Pentium III microprocessors, and we think INTC will comfortably meet expectations for sequential unit growth in the 9-10% range for the September quarter. A favorable mix shift should lead to a slight increase in blended ASP. Recent checks with industry sources have indicated improving demand for INTC microprocessors in September after a relatively soft August. We believe this is a positive indication for the PC industry and for INTC's business. We view the recent pull back in INTC shares as an excellent buying opportunity. We think that investors will regain enthusiasm for semiconductor stocks and for INTC when it becomes clear that the industry cycle is not over, and revenue and earnings results for Q3 and Q4 are likely to exceed current expectations. We reiterate our Buy and $90 12-month target price Bear Stearns: 12/00E $1.62; Q3 $0.42 12/01E $1.92 Consensus: 12/00E $1.72; Q3 $0.41 12/01E $1.86 Consensus Rating: 1.5 (Last Updated 9/18 ) ++++++++++++++++++++++++++++= * Micron Technology (MU) $58.50 - $34B mkt cap: Initiating Coverage with a STRONG BUY Rating & a $120 Price Target AugFY00: INITIATING $7.1B/2.30 AugFY01: INITIATING $11.4B/4.72 · Under-investment in DRAM capacity in the last 3 years (Exhibit 1) will continue to extend the current dislocation in supply vs demand in the DRAM marketplace in this new semiconductor up-cycle. We believe this will lead to industry DRAM bit supply not catching up with total demand till at least the end of calendar 2001. · We believe that the company is the "lowest cost producer" in the DRAM industry giving the company incredible leverage as it continues to ship a higher mix of denser and lower geometry devices moving forward. · The company is currently operating in a tight DRAM supply environment such that over 95% of the shipped product is being sold directly to the company's contract OEMs. Less than 5% is actually being sold in the spot market. · The 64Mb "spot prices" have been under pressure since mid July and have declined from the $8.75 - $8.50 range to under $7.00 ($6.75 range) last week due primarily to a seasonally slow PC demand environment in the July and August time frame. We expect the spot prices to start edging higher moving forward during the balance of the month of September and during the second half of this year. · Since the current quarter (1Q:01) will be the crossover quarter in terms of a much larger number of 128Mb units shipped vs the 64Mb, if anything, in our mind it is more appropriate to track the 128Mb spot prices (which have held fairly stable in the recent past and are expected to moving forward) to "gauge true supply vs demand dynamics in the DRAM industry" than the 64Mb device. · We are extremely bullish about the company's prospects moving forward and are thus initiating coverage with a Strong Buy recommendation and a $120 price target, or 25.5 times our fiscal 2001 EPS estimate of $4.72.

To: Madharry who wrote (8493)	9/19/2000 3:20:50 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Semiconductor Equipment and Materials International Applauds Historic Senate Vote for China Trade WASHINGTON, Sept. 19 /PRNewswire/ -- Semiconductor Equipment and Materials International (SEMI) applauds today's historic vote in the U.S. Senate in favor of permanent normal trade relations (PNTR) for China, a critical step towards realizing the benefits of China's expected accession into the World Trade Organization (WTO). ``This is truly a historic day for the United States, for China and for global free trade,'' said Stanley Myers, president and CEO of SEMI. ``Today we have taken a giant step forward towards realizing the potential of the China market. We salute Congress for recognizing the importance of opening doors with China and for their courageous votes in favor of PNTR.'' China is one of the fastest growing markets for semiconductor manufacturing equipment and is expected to nearly quadruple by 2003, growing to a $4 billion market. With China's pledge to sign the Information Technology Agreement (ITA), tariffs on semiconductor equipment -- which range as high as 35 percent today -- will drop to zero by 2005, opening the door to even greater market expansion and growth for semiconductor equipment and materials. Based in San Jose, Calif., SEMI is an international trade association serving more than 2,400 companies participating in the $65 billion semiconductor and flat panel display equipment and materials markets. SEMI maintains offices in Austin, Beijing, Boston, Brussels, Hsinchu, Moscow, Seoul, Singapore, Tokyo and Washington, D.C. For more information, visit SEMI on the Internet at www.semi.org. SOURCE: Semiconductor Equipment and Materials International