To: Gottfried who wrote (10573 ) 8/7/2002 11:09:53 AM From: Terry D Respond to Charles F. Boucher - Semiconductors Holding The High Ground: Industry Outlook For 2H02 & Beyondthe semiconductor industry has adjusted its expectations for a slower 2H recovery than previously anticipated . We expect the September quarter to be relatively quiet, with semiconductor demand showing moderate improvement, governed by end market demand, which remains hamstrung by persistent weakness in corporate technology spending. We expect relatively few positive or negative surprises. Inventories are low and declining capacity growth is weak , and most companies have resized appropriately for current business conditions. We believe corporate technology spending is at unsustainably low levels and is unlikely to decline further. We are starting to see early positive signs from the PC market: recent data from the Asian motherboard and PC clone vendors has been more positive; we have seen improved bookings for several PC component suppliers. We expect a moderate seasonal recovery in PC demand to drive sequential bookings and sales growth for PC component vendors in the September and December quarters. The economic outlook has taken on greater significance, with some disappointing data in recent weeks. The sharp sell off in semiconductor stocks in the last week may have marked a bottom in the group. Although valuation metrics remain mixed, we believe current valuations are below fair levels for many semiconductor stocks. Although we think the September quarter may lack strong positive catalysts, we think the data will support a modest seasonal recovery. [No mention of new tech as a driver.] [Yadda-yadda] - focus on exposure to PCs, consumer electronics, enterprise hardware, and industrial/automotive applications, because we believe these are the markets that are most likely to see demand improvement during the second half of 2002.[narrowing the field, not] ...Cypress, Fairchild, Intel, LSI, National Semi, Texas Instruments, Vishay...Lattice is long term value, lacks catalyst.
