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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: John Cuthbertson who wrote (8923)	10/23/2000 6:27:21 PM
From: Sun Tzu	Respond to of 10921

NEW YORK, Oct 23 (Reuters) - The shares of National Semiconductor Corp. (NYSE:NSM - news) tumbled more than 30 percent in after-hours trading on Monday after the diversified maker of computer chips warned that second and third-quarter sales may be lower. The Santa Clara, Calif.-based chip maker last traded on the Instinet electronic brokerage system at $25-1/2, down from a regular session close of $36-15/16. National Semiconductor said its mobile telephone customers were hit by lower-than-expected demand, which in turn crimped its sales and forecasts. The company said the sales in its current second quarter and in the third may fall below the first quarter's $640.8 million.

To: John Cuthbertson who wrote (8923)	10/23/2000 11:19:38 PM
From: Jacob Snyder	Respond to of 10921

re: unfortunately the sum of market shares failed to expand beyond 100% It does tend to create problems, down the road, if everyone's plans depend on increasing market share. The truly amazing thing is, they do this over and over and over, cycle after cycle. And in lots of industries. I've been bottom-fishing in the mobile-home manufacturers. That industry currently has about 30 more factories than it needs, and about 2000 more retail outlets than it needs. Every major company in the industry (except one) has negative EPS. How did this happen? Easy. When times were good and credit was easy, everyone made ambitious plans to expand market share, and built the infrastructure to support those over-optimistic plans. For most of the 1990s, more mobile homes were being built every year than were being sold. Inventory and debt went up, year after year. But no one was willing to back down on their plans, so it just went on until the bankers woke up one day and said, "Oh my god, a lot of the money we've been lending out, (to companies for expansion plans, and to Mobile Home buyers with shaky credit histories) it's never going to get repaid". So they slammed on the brakes, stopped lending to anyone for any reason, and the weak players got pushed to the wall. It is obvious that everyone couldn't increase their market share at the same time, yet that's exactly what they tried to do. And what various semi sectors had tried to do, over and over. re: the humbling of the Korean chaebols in the 1998 crisis. Chip-making factories today are like auto factories and skyscrapers in the 1950s, and steel factories in the later 1800s, and cathedrals in the Middle Ages. They are the "prestige item" that every country and province wants, to show they are not a backward country any longer. "Look what we have, ours is bigger than yours." I don't think there will be a shortage of countries willing to worsen the cycle by throwing money (in good times) at the semi industry, and then closing down new fabs (in bad times). If not Korea, then Taiwan. If not Taiwan, then Malaysia. If not Malaysia, then China. And, by the time the Chinese have learned this expensive lesson the hard way (no one seems to be able to learn from other's mistakes), it will be the turn of the Brazilians (4 cycles from now, in 2012) and Poles (5 cycles from now, in 2015).