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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: TREND1 who wrote (18515)	6/21/2001 6:51:33 PM
From: Sully-	Respond to of 30051

Micron Tech (MU) 37.71 +0.87: -- Update -- Call ended....The tone of the call was relatively bearish as it's the usual suspects hovering over MU: severe pricing pressure, high inventory levels and no sign of a broad recovery on the horizon. The key to forecasting MU is listening to the box makers as they have a better feel for when the market might bottom....stock at 36.59. Semi Equip Book/Bill : Perhaps the most vivid depiction of the semi equipment sector's woes can be seen in this string of orders numbers: Dec $2.37B, Jan $1.85B, Feb $1.61B, Mar $1.20B, Apr $723, May $704M. That's a 70% decline in just five months, and as of May, orders were still falling. Semi Equip Book/Bill : North American-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 0.46 in May 2001, below a 0.54 mean of three estimates. This represented a slight improvment from 0.44 in April (revised from 0.42). The CEO of SEMI (which collects the data) noted that while the book/bill rose, both orders and shipments fell again, and he says that sustained year/year improvement is probably 3-4 quarters away. Micron Tech (MU) 37.71 +0.87: -- Update -- On conference call, company described how bad pricing is. 128mb SDRAM prices were $4.50 last qtr, $3.60 this qtr and now below $3..."Not seeing signs of a broad recovery, but there are some bright spots."....stock at 35.98. Micron Tech (MU) 37.71 +0.87: -- Update -- After the $260 mln inventory writedown, Micron inventories were $836.6 mln, from $1.141 bln in the Mar qtr. The inventory writedown was due to reduced value of the inventory rather than obsolescence, so it appears that unit inventories are little changed from the Mar qtr even after the writedown. ON Semiconductor (ONNN) 4.94 +0.14: Company warns for Q2; sees revs of $306.8-$317.7 vs. Multex consensus of $332 mln; expects Q2 loss excluding items of $0.35-$0.45; also expects Q3 revs to be lower than Q2 revs; cites the company's turns business (orders shippable in the same quarter) as below expectations in the second quarter due to continued high customer inventory levels; the company is experiencing continued pricing pressure. Micron Tech (MU) 37.71 +0.87: Reports Q3 loss of $301 mln or $0.50, which includes a pre-tax inventory writedown of $260 mln; First Call consensus was a loss of $0.14; revenues were $818.3 mln vs Multex consensus of $933 mln. briefing.com Ö¿Ö

To: TREND1 who wrote (18515)	6/21/2001 6:53:45 PM
From: The Freep	Read Replies (1) \| Respond to of 30051

Hey, Larry. I thought you didn't predict the Naz? <g> You may very well be right about the bottom being in, but I'm curious how the current book to bill supported that. Back in 1998, the Naz hit bottom in October, but the Book to Bill had a double bottom in August and September, with October showing a substantial uptick. Using that as a comparison, why did the Naz bottom this time in the month of the lowest ratio as opposed to 2 months after it? Also, and maybe this was the same in 1998, but while the b2b ratio increased, both sales and bookings decreased in May, meaning that price to sales ratios of the semi-equip makers probably just got higher (and look to get higher still, as the SEMI PR made it clear that there's no immediate turnaround here). Frankly, I hope you're right about the bottom being in. And the increase in the book to bill may show a stabilization in the business. Short term, maybe it all depends on how the analysts spin the report tomorrow morning? It's possible that the book to bill really won't get worse. . . but the numbers underlying it might. Is that bullish or bearish? I really don't know. the freep

To: TREND1 who wrote (18515)	6/21/2001 10:49:23 PM
From: Jdaasoc	Read Replies (1) \| Respond to of 30051

Larry: (1) April was .44 (2) May was .46 (3) These numbers support the April 4, 2001 Nasdaq low of 1619 as being the final Low. IMHO. Signifance of (1) and (2) is meaningless as both orders and shipments continue to decline. Therefore (3) becomes a meaningless statement as well. Sorry. SDRAM DIMMs are selling just above the cost of DIMM preparation. MU still has inventory value close to 13 weeks sales. They could write off another $260 M besides large operating loss next quarter. Find me some book to bill numbers from 1988-1992 period where economy was in recession and you will see prolonged dip in BtoB of more than 3 months. The bill part of BtoB has been shrinking for 9 months now hiding the real collaspe of demand for semiconductors for 9 months now. No pickup is going to happen as companies are still laying off employees. Debt writeoffs is always been the item that has to be accounted for last but not least before economy turns around. I thought this morning that Eastman Kodak had a problem with a major customer when they announced a $76 M writeoff from one customer and cancellation of bond offering. I find out this evening it was from one store NYC chain called Wolff Photo. Man I hate to see how big the bag of smelly debt gets to be recession starts to hit. Debt writeoffs if this is real recession rather than short economic slowdown will rival the percentage of debt repudiation of 1989-91 real estate collaspe but debit balance that we start form is much much larger by consumers and businesses. GBLX, LVLT, COVD, RTHM and a slew of other multi billion debts by telecoms will be repudiated before we are out of the woods. The survioring companies in telecom and network equipment makers who made many of the loans will need special handouts from Congress like big steel and automakers in 70's; savings and loans in late 80's. IMO CSCO and other network equipmewnt will be like real estate in late 80's to early 91. Many sellers few buyers and declining prices. The fact it is tech equipment this time around and not real estate will cause its value to go to near zero before it can be reclaimed in bankruptcy courts. john