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Technology Stocks : Applied Micro Circuits Corp (AMCC) -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (1335)	2/11/2001 2:42:19 PM
From: FR1	Read Replies (1) \| Respond to of 1805

I guess everyone here believes in the old saying: "It is always darkest just before.....it goes totally black." Three things to consider: 1) Why is there such a build up? Ans: because the FED jacked interest rates up to the sky and choked the life out of people that bought the semis like ATT and WCOM. ATT could not refinance their debt and were forced into all kinds of crazy things like breaking up the company. Now it is going the other way. It is only rational to assume that spending will now increase in the sector. AG will do whatever is necessary on the money side till it occurs. You can argue how fast but it is difficult to argue it is not going to occur. 2) I have tremendous respect for people like Dan Niles. He is extremely accurate at looking up numbers and putting together a clear picture of where we are. The problem you run into is when they take their charts and extrapolate out into the future what has occured in the recent past. Don't forget Niles put out a strong buy on INTC the morning of the day they came out and first warned. By the end of the day they were down 30%. The future is not more inventory glut it is less. The only question is how much less and how fast do we work off the problem. 3) Somebody help me on this. Absolutely everybody is singing this tune about the last half of the year before we reach any bottom and recovery. TSMC, who makes the damn chips, says the opposite. They say 30 to 60 days max. Who do you believe? **************************************** TSMC sees chip sector firming up SEMICONDUCTORS: Morris Chang, chairman of Taiwan's largest chipmaker, says the market will likely reach bottom in March or April By Tsering Namgyal STAFF WRITER The nation's top technology guru said he was cautious on the fate of the slowing semiconductor business, saying that the bottom is near for the chip sector. "I now think that we are close to the bottom of the semiconductor sector," said Morris Chang (±i©¾¿Ñ), chairman of Taiwan Semiconductor Manufacturing Co (¥x¿n¹q), yesterday. "We may reach there in March or April." But the speed at which the sector may recover will depend upon whether US consumer demand picks up and how the American market responds to recent interest rate cuts, the boss of the world's largest made-to-order chipmaker said. Chang attributed the chip slowdown to "demand side" factors, pointing mainly towards slowing demand for PCs and other consumer electronics, seen as the main driver of chip sales. TSMC's earnings in the fourth quarter last year jumped by a staggering 158 percent to NT$21.47 billion, while revenue rose NT$53.8 billion, up 127.2 percent from the same period last year. "It is in line with our expectations," said Rick Hsu (®}âü¦¨), senior technology analyst at Nomura Securities (³¥§øÃÒ¨é). But the company may see its earnings slow sharply over the next few months as the chip sector comes to terms with lackluster global demand. The company expects revenue to fall 25 percent in the first quarter, while its operating margin will hover between 26 percent to 30 percent, Chang said. He also said the second quarter this year will remain "flat." The company sells nearly 68 percent of its products to North America -- indicating its close ties to the US economy -- and 17 percent to clients in the Asia Pacific region. The company has been preparing for a slowdown for the past two months, Chang said, adding that the firm will adjust its business strategy to cope with the expected market weakness. "We will turn more aggressive on research and development while turning more conservative on capital expenditures," Chang said. The company expects its wafer shipments to drop 29 percent from last quarter and its capacity utilization ratio -- which is total wafer sales divided by foundry capacity -- to fall to 70 percent, an unimpressive figure in the chip sector. "The forecasts are much weaker than expected," said Ted Huang (¶À©v·½), senior proprietary trader at Capital Securities Corp (¸s¯qÃÒ¨é). "All will depend upon how US demand picks up in the coming months." Thanks to greater production of high-technology products, the company expects its average selling price in the first quarter to increase by 7 percent. "This is purely due to the change in the technology mix," Chang said yesterday during the firm's institutional investor conference. Chang said that the "situation in the high-tech sector has stabilized compared to the past two months," when the sector had been bogged down by a series of warnings of slower growth. The company has made "adequate preparations to cope with the slowdown," Chang said. TSMC plans to spend NT$7.9 billion this year on research and development, up 53 percent from last year, while the company's capital expenditure will decrease from US$3.8 billion last year to US$2.7 billion this year. But the company said it will not scale back expansion projects.