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

To: Road Walker who wrote (15146)	9/28/2000 9:49:28 AM
From: Sam	Read Replies (1) \| Respond to of 60323

John and thread, For those who don't read the "Blood" semi thread, here are two articles on growth, past and future projections, that may be of interest: Message 14468764 <<Heavy demand for electronic systems has resulted in a current business cycle that may end up to be longer and stronger than previous cycles. Current device demand is largely driven by wireless communications, PDAs, digital cameras, and toys such as MP3s. "I think people are underestimating the strength of this cycle," said Fuhs.>> <snip> Message 14470632 <<The two forecast speakers noted there are currently ``mixed signals'' in the stock market, which has raised concerns over the strength of electronics demand entering into what is usually a seasonally strong period. ``We believe that the semiconductor and semiconductor capital equipment cycle is entering into the second phase of an extended upturn,'' they noted.>> <snip> <<However, the two did sound one note of caution. They said the shift to smaller circuit sizes on new processors had presented more significant challenges than initially thought. Those challenges along with a tight supply chain in the equipment marketing will impose a natural cap on the growth of incremental manufacturing capacity.>> <snip> There is also, on the SST thread, a report by SSB analyst Johnathan Joseph which disagrees with the above, claiming that "within a quarter or two", supply and demand will either be in balance or supply will saturate demand. Message 14468166 << While we fully recognize SST itself is doing an excellent job, we expect increasing supply in the Flash market will in the next quarter and two result in weaker prices and eventually slower growth. As a result we retain our current rating of 3S and price target of $35.>> <snip> <<Last week, prices declined from 4-9% across all density levels. Spot prices are still above contract prices, but if this trend continues, we could see contract prices begin to fall in a quarter, or so, which would dampen growth and profitability in the sector.>> <snip> This is the titanic battle going on in the bowels of Mr. Market and semiconductor stocks right now, not just Sandisk. Who will be right? Well, I'm not expert enough to say with any great certainty, but it appears to me that the conjunction of all of the new applications for semiconductors along with the transition problems that fabs are reportedly having with moving to the next generation of equipment suggests that supply won't catch demand quite as soon as Mr. Josephson believes. In addition, it seems to me to be a mistake to lump all semiconductor markets into one group. But whether Mr. Market will ever become sublte enought to acknowledge that error by differentiating between the different segments of the semiconductor market--that is another question entirely. The herd mentality tends to rule, unhappily. For my part, I remain long on both Sandisk and SST, but have some cash reserves. Sam

To: Road Walker who wrote (15146)	9/28/2000 10:24:50 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

John, I hope you're right that stocks are pretty much near fair value. But we're still seeing new reports, such as one on CNBC this morning, to the effect that telecom service providers are lowering their budgets for equipment purchases. This kind of report can easily be extrapolated to include peripheral equipment such as flash memory, thereby providing more ammunitiion for another hit on equipment suppliers, irrespective of whether it's intended for telecommunications or other technology applications. The report, I might add, flies in the face of the latest data showing strong growth in durable goods sales--which includes the sort of equipment made by SNDK.