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Technology Stocks : SILICON STORAGE SSTI Flash Mem -- Ignore unavailable to you. Want to Upgrade?

To: Steve 667 who wrote (1356)	12/16/2000 6:56:26 PM
From: hueyone	Read Replies (1) \| Respond to of 1881

Re:This looks to me like a very undervalued and un-understood company that got thrown out with the bath water i.e. the chip sector. Agreed; that is why I was buying SST again yesterday. Where did you see the warning that earnings will slow? First, I would not call it a warning. SST still has a growth rate that 99.9% of all tech companies would die for. Second, thanks very much for asking me to clarify my statement that includes one mistake. Listen to the November 6, AEA Classic presentation again, but skip to slide 30 and match up Bing Yeh's (CEO) oral presentation with the slide. Then listen to the rest of Bing's oral presentation including the question and answer period. vcall.com From slide #30 we find: Near term: Cautiously Optimistic --Slowdown in PC industry will impact revenue growth. --Royalty revenue expansion will help improve gross margin. Year 2001: Very Optimistic (also includes reasons why) From Bing's voice with slide 30, we find wafer availability will impact near term revenue growth as well. (Please ask MicroE about the wafers.) In the question and answer period, a questioner asks what percent of the business is PCs and Bing notes that revenues related to PC desktops accounted for 15% of revenues in Q3. Later, a questioner asks for some clarification about slide #30, the "Cautiously Optimistic" slide. Bing states that 50% plus sequential quarterly growth is unsustainable (he must be referring to sequential quarterly EPS growth here) and in the near term growth will slow down, but that growth will ramp up in the second half of 2001 again---new products, smaller die sizes and increasing royalties. The questioner then asks whether the company is changing guidance. Jeff Garon (the CFO) chimes in and says no, there is no change in guidance. The questioner notes that SST still has a great growth rate even if the growth rate is not 50% sequential quarterly EPS growth rate of the last quarter. Then I took the liberty of injecting some calculations in to my little report on what he company said. Last quarter's sequential quarterly EPS growth rate is 54%. If the company meets EPS expectations this quarter, as they say they will this quarter, the quarterly sequential EPS growth rate will be 24%. This assumes earnings will increase from 37 cents per share to 46 cents per share. But I screwed up the statement to you and said revenues instead of earnings. So thanks for asking about this statement so I could clarify the matter. I apologize for creating some confusion . Bottom line: If this company continues to perform like they say they will, at today's prices, SST is one of the best buys in all of hi tech for 2001. (IMHO) Best, Huey

To: Steve 667 who wrote (1356)	12/17/2000 12:36:33 AM
From: hueyone	Read Replies (2) \| Respond to of 1881

Steve, I see I made another mistake after listening to AEA. The company guidance for Q4 is 48 cents per share, not 46 cents per share. 46 cents per share was the analyst's consensus estimates. The consensus estimates have just been raised to 47 cents per share. It seems the analysts are beginning to believe the numbers. See the "consensus EPS trend" under this link and you will see the consensus estimates for Q4 have been slowly rising towards the company guidance. biz.yahoo.com Here is the snip of the Q3 earnings release which contains the actual Q4 and fiscal 2001 guidance: www2.marketwatch.com SNIP:"With more than 60 new products introduced since mid-1998, the additional wafer capacity that we expect to bring on line in 2001 and our licensing strategy for embedded applications, we believe SST is well positioned to become a strong leader in flash memory. Looking forward, we expect to see robust growth in our business through the balance of 2000 and well into 2001. For the fourth quarter, we expect our product revenue to grow approximately 20 percent from the third quarter, mainly constrained by wafer supply. Product gross margin is expected to expand to approximately 47 percent, based on expected cost improvement and assuming continued stable pricing environment for the markets we are in. Royalty revenue is expected to be greater than $10 million. Operating expenses are expected to result in an operating margin of greater than 35 percent. Our expected tax rate is approximately 35 percent for the fourth quarter and earnings per share are expected to be approximately $0.48. For the first quarter of 2001, we expect our product revenue to grow approximately 20 percent from the fourth quarter of 2000. Product gross margin is expected to expand to approximately 49 percent, based on expected cost improvement and assuming continued stable pricing environment for the markets we are in. Royalty revenue is expected to be greater than $6.0 million. Operating expenses are expected to result in an operating margin of greater than 37 percent. Our expected tax rate is expected to be approximately 38 percent for the first quarter of 2001 and earnings per share are expected to be approximately $0.56. For fiscal 2001, we expect our product revenue to grow approximately 125 percent from fiscal 2000. Product gross margin is expected to expand to approximately 50 percent, based on expected cost improvement, additional products and applications and assuming continued stable pricing environment for the markets we are in. Royalty revenue is expected to be greater than $30.0 million. Operating expenses are expected to result in an operating margin of greater than 38 percent. Our expected tax rate is expected to be approximately 38 percent for fiscal 2001 and earnings per share are expected to be approximately $2.90,” he said. Hope this helps. I am sure you have read the guidance before, but it is worth printing again for potential new investors. Bottom line is still the same: SST is a great buy if the company does what it says it is going to do! I am optimistic that they will. Their guidance has always been very conservative in the past and a lot of the forward sales have already been made on volume purchase agreements. Best, Huey

To: Steve 667 who wrote (1356)	12/18/2000 12:54:39 AM
From: hueyone	Respond to of 1881

Steve 667, I just listened to the Nov 29 transcript of the CSFB conference again. Of course, the general tone was very bullish. You can listen to it at the SST website in the investor information section: ssti.com A few highlights are listed below: --Wafer capacity (availability to SST) will double in 2001. Again, you probably need to ask Microe (poster on this board) about the technical aspects of silicon wafers. I just know semicondutor companies need silicon wafers to make chips. (gg) --Bing emphasized the point that royalties are on the verge of "taking off". --TSMC (Taiwan Semiconductor) just told Bing they have over 50 customers now using Superflash for embedded products. TSMC is a direct licensee of Superflash from SST. ---The number of products using Superflash is "ramping up." The company has gone from selling 15 million units in 1998 to 300 million units this year. ---The goal is to put Superflash in every electronic device. All digital electronic devices use flash. ---Bing says the street is "grossly discounting SST's IP." ---Bing explains the advantages of the SST Superflash chip: -Low cost structure -Low power consumption - More reliable - Inherent small form factor - Simpler design results in faster time to market - Way less periphery circuitry. - Smaller die size - Erase time 1000 times faster than Intc or Amd. (This is not a misprint!) Of course there is much more info in the presentation than that, but those are just a few highlights. I think Bing hit the nail on the head when he said the street is "grossly discounting SST's IP". For the most part, the steet looks at flash like DRAM---a commodity product. Best, Huey