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To: Tony Viola who wrote (118085)	11/16/2000 11:26:12 AM
From: Joseph Pareti	Respond to of 186894

Meanwhile, Merrill Lynch's Joe Osha lowered its rating on communications chips due to inventory concerns and belief that the group lacks a near-term catalyst. Merrill said its believes there is a high probability the inventory buildup will correct over the next two quarters. "While many of the stocks in this group are already down 50 percent over the past several weeks, we believe that inventory concerns, coupled with telecom service provider capital spending concerns, will weigh on the group for the next one to two quarters," Osha said in a note to clients. Further, he notes that the group still sports the highest valuation in the chip business -- even after the recent decline. Merrill lowered its intermediate-term ratings on Applied Micro Circuits (AMCC: news, msgs), Broadcom (BRCM: news, msgs), Vitesse Semi (VTSS: news, msgs), PMC-Sierra (PMCS: news, msgs) and TranSwitch (TXCC: news, msgs) to an "accumulate" from a "buy." Among those stocks, PMC fell 10 percent, Broadcom 9.8 percent and Applied Micro 9.8 percent.

To: Tony Viola who wrote (118085)	11/16/2000 11:29:23 AM
From: Bob Kim	Read Replies (1) \| Respond to of 186894

Tony, Topic: Not Election-related Why? "We are downgrading our intermediate-term BUY rated comm-IC stocks to ACCUMULATE based on inventory concerns, and belief that there is no near-term catalyst for the group." On 11/7/2000 ML said: "We expect some near-term weakness in these stocks as inventory flushes through the OEM supply chain, but we still believe that we are in a secular investment cycle in communications equipment and that the long term growth drivers for the industry are intact." On 10/27/2000 ML said: "We reiterate our Buy ratings on the gorillas in the sector, and on the leading suppliers of WAN edge and core ASSPs, including AMCC, VTSS, PMCS, TXCC, BRCM. We continue to view our estimates on these companies as conservative."

To: Tony Viola who wrote (118085)	11/16/2000 1:10:35 PM
From: Hightechhooper	Read Replies (1) \| Respond to of 186894

RE: Bonedheaded Joe Osha I am continually amazed at how a supposedly "efficient" market can give any weight to comments that add no new information to the marketplace. Isn't it obvious to everyone that this guy is trying to generate "sale" prices for his clients so that he can turn around and upgrade everything in just a couple of months? Even if he proves to be correct and the earnings for these companies in the next 2 quarters are somewhat less than current estimates, how can that significantly impact the stock price which is supposed to be based on the discounted value of those earnings over the life of the company. He is not changing those longterm estimates and that is what drives a stock price (in theory). So, given that markets are not efficient it seems like December is potentially a bad month for INTC in terms of stock price. This is when earning warnings will come from the weak industry players and that weakness will be extrapolated to the whole industry and all its subsegments. People like Bonehead Joe will wait for the stocks to stabilize after that news and then jump in with cries that "the sky is falling". In January, however, INTC will pull the bag off Bonehead Joes head so everyone can see his true form. He will then disappear from the semi world forever because he was boneheaded enough to make such a vocal, pessimistic stand against one of the most successful companies in the history of the world at a time when major product transitions will reignite demand in its current strongholds and take share from others in its newer market segments. The moral of the story; Never fight with a gorilla (especially if you are nothing more than a boneheaded analyst chimp...I mean chump)