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To: Henry D who wrote (1261)	8/4/2002 12:43:14 PM
From: Frederick Langford	Respond to of 1854

Picked up a KLAC short near close Friday. SOX looks pretty bad here. Probably just a scalp, watch the trend and go from there. Fred

To: Henry D who wrote (1261)	8/4/2002 12:51:02 PM
From: Frederick Langford	Respond to of 1854

Semiconductor Sales Point to Slow Recovery By JOHN SCHWARTZ New York Times Saturday 8/3 Anemic growth figures from the semiconductor industry and a warning on earnings from National Semiconductor yesterday offered further proof that an economic recovery is not imminent. "The recovery is going to take a lot longer than people expected," said Mark Grossman, an industry analyst at S. G. Cowen Securities. The Semiconductor Industry Association stressed the good news in its announcement of quarterly sales figures yesterday: an increase of 5.8 percent, to $11.35 billion, in the June quarter. "The semiconductor industry is continuing the recovery that started late last year and we are encouraged by the progress we have made pulling out of the 2001 downturn," said the group's president, George Scalise, in a statement. But in fact, sales for the month of June showed a 0.2 percent decline over the previous month — essentially flat — and a 1.6 percent decline over the comparable month a year earlier. And sales for the quarter actually declined 1 percent in the Americas and 5 percent in Europe compared with the previous quarter, but were offset by a 16.3 percent increase in Japan and an 11 percent increase in the Asia-Pacific region. Industry analysts took those figures with less equanimity than the trade group. "The monthly number is kind of a groaner," said Dan K. Scovel of Needham & Company. "There's nothing to get excited about a flat month." The announcement from National Semiconductor after the close of markets on Thursday was one cause of a sharp sell-off in the stock market yesterday. The company told investors that it expected sales in its fiscal first fiscal of 2003, which ends Aug. 25, to be about the the same level as the company's recently completed fourth quarter, in which National Semiconductor reported $419.5 million in revenue. The company last month predicted that sales would grow as much as 8 percent in the current quarter, but said that overall order rates were lower than expected in June, especially for personal computers and peripheral devices like monitors. The company's stock closed yesterday at $16.88 a share, down 25 cents for the day. Other chip makers, including Advanced Micro Devices, Texas Instruments, Xilinx and Intel, also lost value in the selling wave. Industry analysts said that the causes of the semiconductor slump were clear, but the path to recovery was less so. Continuing weakness in the market for personal computers has hurt sales of the industry overall and at National Semiconductor, Mr. Scovel said, citing the fact that the greatest weakness was seen in microprocessors and memory chips, both heavily used in personal computers. A hoped-for recovery, which had been seen in increased sales earlier this year, turned out to be attributable to PC companies' building their inventories and not to an increase in product sales, so the industry continued to languish, analysts said. Compared with conditions in the market a year ago, which he characterized as "catastrophic," Mr. Scovel said the market showed signs of firming up and a possible recovery in what he called "a year of convalescence" marked by feeble growth. "The good news is it's not that bad," he said. "The bad news is it's not that good." Doug Andrey, a spokesman for the Semiconductor Industry Association, suggested that market conditions often turned upward in the fall as back-to-school purchases of computers and consumer electronics pick up on the way into the Christmas buying season. Another analyst, Scott G. Randall of SoundView Technologies Group, also saw reasons for hope in the seasonal sales cycles. "As an industry, we're slowly recovering," he said, though "the evidence won't be here until the fall."