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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (40267)	12/1/2000 3:34:36 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

IC Industry Faces Months of Retrenchment, Solomon Analyst Says December 1, 2000 (TAIPEI) -- Jonathan Joseph, of Solomon Smith Barney said that the global semiconductor industry is set for a period of retrenchment and will probably bottom out in the third quarter of next year. At Solomon Smith Barney, Joseph is responsible for predicting global developments in the semiconductor industry. He said that microchip makers would face an uphill struggle in terms of operations, and that related stocks were likely to fall 10 percent to 20 percent before the industry begins to recover. In July, Joseph's predictions that the microchip industry seemed to be sliding downwards from a peak (contrary to the widespread optimistic view for the IC industry), were severely criticized. However, recent trends in the semiconductor industry suggest that he may have gotten it right. Joseph said that Solomon Smith Barney's decision to downgrade its rating for the semiconductor industry in July came after Intel launched bulk CPU shipments, which was believed to be the main reason for the glutted chip market. Intel finally found it difficult to profit from its large-scale product deliveries, because of waning demand in the wireless communication market. Moreover, the earnings warnings issued recently by the cable communication industry, which had a healthy forecast in October, also contributed to Solomon's downgrade decision in respect to the semiconductor industry. Joseph told investors (who wished to take advantage of the sharp fall in semiconductor stocks) to be patient. "There are no immediate profits to be made from semiconductor issues," he said. The semiconductor industry may recover next autumn, provided that the makers confront the problem of redundant production as quickly as possible. Also, he suggested that foreign investors should include several wafer foundry leaders, such as Taiwan Semiconductor Manufacturing Corp. (TSMC) and United Microelectronics Corp. (UMC), as important investment targets over the next three to five years. (Commercial Times, Taiwan)

To: Proud_Infidel who wrote (40267)	12/1/2000 3:40:42 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

The analyst herd seems to be saying, "this sector sucks, the next 6 months look bad, (but things will improve in mid-2001, so don't buy yet). If you have to own a semi-equip, own a smaller-cap." That seems to be the spin-of-the-month. My take is, and always has been, that the semi-equip sector is going to consolidate, and bigger is better, longterm (a time frame of at least 3 years). EMC and CSCO are not cyclicals, and their future profit stream is (correctly) seen as more predictable than AMAT's, so they deserve a higher multiple. But not as high as the current differential.

To: Proud_Infidel who wrote (40267)	12/1/2000 4:07:48 PM
From: Ian@SI	Read Replies (1) \| Respond to of 70976

Brian, Can't speak re CYMI, I've quit following it as I've been out of it for most of the year. PRIA got absolutely trashed not once but twice in the last 3 or 4 months not because of a drop in outlook, but rather because customers ordered their new 300mm product (TurboStacker) for installation in 200mm fabs - something which PRIA hadn't anticipated and couldn't manufacture efficiently. This screwup stemmed from a very successful showing at Semicon West in July. 300mm Turbostacker is standardized across the industry. 200mm versions have to be customized for each fab (almost). In the Nov 21st conference call, PRIA confirmed its outlook and confirmed that it had pretty well cleaned up the manufacturing mess; that all would be fine by 1Q2001. Today, they announced that they've taken a 12% position in a Korean manufacturer that is already building the Turbostacker for the Asian market; and that they have options to acquire 19% of that company; and that it only cost them $12M to get that ownership. Net: PRIA has increased its manufacturing capacity, reduced its manufacturing costs, and is likely to substantially exceed current estimates for the next couple Qs. i.e. - the raincloud hanging over its head is rapidly dissipating. ... or at least that's my take on it. Ian.