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To: j g cordes who wrote (33062)	6/25/2001 8:03:56 PM
From: Johnny Canuck	Respond to of 70378

Jim, The damage seems minimial on island given the size of the revenue miss, but then again so was TLAB before it melted down. The miss in revenue is of TLAB portions too. **************************** The Night Watch: The Chips are Down as Applied Micro Circuits Warns By Yi Ping Ho Staff Reporter 6/25/01 6:31 PM ET Things were torn asunder in the world of tech stocks tonight, as a profit confession threw chip stocks out of whack and bullied buyers into another retreat. Indeed, Applied Micro Circuits (AMCC:Nasdaq - news - commentary) tripped on the late-night ECN platforms after it slashed its first-quarter outlook to a pro-forma loss of between 4 to 6 cents a share excluding restructuring charges, from its previous earnings range of break-even to 2 cents a share. Analysts polled by Thomson Financial/First Call expected break-even earnings for the quarter. The chip maker, whose high-performance, high-bandwidth integrated circuits are used in voice and data transmissions across fiber-optic networks, also lowered its revenue forecast to a range of $40 million to $45 million, compared with analysts' expectations for $73.3 million in revenue and $74.2 million last year. Shares of AMCC recently lost 7.6% to $13.12 on Instinet, and 7.7% to $13.11 on Island, toppling fellow chip maker PMC Sierra (PMCS:Nasdaq - news - commentary), which fell 3.7% to $26.65 on Instinet. PMC Sierra was recently the most heavily traded stock on Instinet. In similar fashion, Vitesse Semiconductors (VTSS:Nasdaq - news - commentary), which had its earnings estimates cut by Goldman Sachs last week, slipped 3.4% to $16.81 on Instinet, while Broadcom (BRCM:Nasdaq - news - commentary), another chipmaker, gave up 1.4% to $34.99 on Island. Xilinx (XLNX:Nasdaq - news - commentary) and Intel (INTC:Nasdaq - news - commentary) were also in negative territory tonight. But TriQuint Semiconductor (TQNT:Nasdaq - news - commentary) remained in the green, gaining 0.2% to $17.40 on Instinet. "Current business conditions continue to be very poor," AMCC wrote in its prepared statement. "The magnitude of this downturn is greater than we or our customers anticipated, and the progress in reducing excess inventory in the channel appears to be slower than they originally thought." Nortel Networks (NT:NYSE - news - commentary), which warned on June 15 of a substantial second-quarter revenue shortfall as well as plans to hand out another 10,000 pink slips, is one of AMCC's largest customers.