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Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: DJBEINO who wrote (8937)	11/16/2000 9:44:26 PM
From: Czechsinthemail	Read Replies (3) \| Respond to of 9582

The decline in UMC following the Merrill Lynch downgrade would be the most obvious reason for ALSC's decline, though downgrades of all the major companies in ALSC's portfolio and general weakness throughout the semiconductor sector doesn't help. My concern for ALSC is this: if the stocks in ALSC's portfolio decline significantly, ALSC loses much of the underlying asset base that has supported its stock price. Given the general weakness among commodity chip makers, I don't think ALSC's chip business is robust enough to support the stock price at current levels. The downgrade of UMC is especially troubling since it represents the lion's share of the portfolio. Conceivably, fears of a semiconductor slowdown will defer new construction plans, which may result in more demand for semi fabs. And though they may lose market value, the shares in ALSC's portfolio don't disappear and will eventually recover. But for the moment, doubts about UMC's prospects along with a more negative view regarding DRAM pricing raise questions about both the present value and the future prospects of ALSC.