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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (52745)	6/5/2002 7:49:15 PM
From: Boplicity	Read Replies (2) \| Respond to of 65232

re: Increasing sales of cellular handsets, personal computers and of digital consumer electronics devices during the next 10 quarters will lead the rebound, Decker said Where is coming from with that statement? Maybe consumer electronics, but the other areas are stalled big time. b

To: Sully- who wrote (52745)	6/6/2002 12:49:11 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Growth is not enough - growth in excess of expectations is needed Semiconductor Tea Leaves : The semiconductor index is down 2.8% in response to a Merrill Lynch downgrade, but investors could have made the same determination that Merrill made by taking a quick look at yesterday's SIA (Semiconductor Industry Association) data. The SIA released its long-term industry forecasts yesterday afternoon. The headline numbers looked relatively impressive: growth of 23.2% in 2003 and 20.9% in 2004. In its last outlook from Nov 7 2001, the SIA saw 21% growth in both 2003 and 2004, so the new numbers look relatively friendly. But a closer look reveals a small problem with this optimistic view. In November, the SIA expected 2004 sales of $218 bln. Yesterday, they put 2004 sales at $213 bln. And don't bank on that lost ground being made up in 2005, for which they are forecasting just 0.9% growth to $215 bln. All that has happened in the last seven months is that the 2002 forecast has come down a bit, thus boosting the 2003 growth rate but reducing the level of sales in both 2003 and 2004. The message to take away is plain: the semi sector is recovering, but the recovery is not living up to expectations. Given already rich valuations in the sector which discount a healthy recovery, any shortfall in the actual recovery will tend to depress the stocks. That was essentially the message behind Merrill's downgrades today, and it's a message worth taking seriously. We are long past the point when semi stocks can do better simply because the sector's sales have turned the corner and are now heading higher. Growth is not enough - growth in excess of expectations is needed, and yesterday's SIA data provide no evidence of that. - Greg Jones, Briefing.com