Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (2017)	9/16/2002 7:24:44 PM
From: Wally Mastroly	Read Replies (1) \| Respond to of 10065

Chip Stocks Sink to 1998 Lows Monday September 16, 6:33 pm ET - Reuters Business Report By Daniel Sorid NEW YORK (Reuters) - A profit warning from Singapore's Chartered Semiconductor Manufacturing Inc.(NasdaqNM:CHRT - News) and a barrage of bearish research notes from Wall Street firms pushed semiconductor stocks on Monday to their lowest point in more than 3-1/2 years. "This is really just a crummy environment we have," said Banc of America semiconductor analyst Mark FitzGerald. "The analysts are just starting to pile on." The Philadelphia Stock Exchange semiconductor index(Philadelphia:^SOXX - News) fell 11.30 points, or 4.0 percent, to 269.22. The index was last this low in November 1998. Paltry corporate technology spending and troubles in the telecommunications industry have fed a technology slump that began in 2000. Among the stocks leading the index lower were Linear Technology Corp.(NasdaqNM:LLTC - News), down 6.0 percent at $21.17, Maxim Integrated Products Inc.(NasdaqNM:MXIM - News), down 5.5 percent at $26.37, and Lattice Semiconductor Corp.(NasdaqNM:LSCC - News), off 4.4 percent at $6.53. Chartered Semiconductor on Monday warned it would miss fourth-quarter revenue targets, sending the world's third largest contract maker of microchips down 6.7 percent on Nasdaq. Earlier, it closed down a similar percentage in Singapore, where it ended at S$1.16, off nearly 8 cents. Banc of America's FitzGerald said he expected revenue at chip foundries, which produce chips designed by other companies, to stall in the third quarter and decline in the fourth quarter, breaking a historical pattern of strong end-of-year business. FitzGerald cut earnings estimates on the two largest foundries. He said he now expects Taiwan Semiconductor Manufacturing Co. Ltd.(Taiwan:2330.TW - News) to report 2002 earnings of 24 cents a share from a previous estimate of 26 cents, and United Microelectronics Corp. (Taiwan:2303.TW - News) to report full-year earnings of 10 cents a share from an earlier view of 14 cents. Prudential Financial and Merrill Lynch cut earnings estimates on communications chip makers, who supply semiconductors to network equipment makers, as well as other semiconductor makers. Prudential analyst Hans Mosesmann cut his stock price target on PMC-Sierra Inc. (NasdaqNM:PMCS - News) to $6 from $11, citing risks that range from pricing pressure to deterioration to an already battered communications industry. PMC-Sierra stock fell 48 cents, or 8.2 percent, to $5.36 in mid-day trading on Nasdaq. Mosesmann cut estimates on 14 chip makers, including Texas Instruments Inc. (NYSE:TXN - News), the dominant maker of chips for mobile phones. Texas Instruments stock was off 73 cents, or 3.8 percent, to $18.27 on the New York Stock Exchange. "With the exception of wireless handsets, I think most areas of communications continue to be bad or perhaps getting a little weaker than we had anticipated," Mosesmann said. Merrill Lynch also took a swipe at communications chip makers, warning inventories of communications equipment are 23 percent above normal. Analyst Mark Lipacis cut estimates on PMC-Sierra Inc., Applied Micro Circuits Corp. (NasdaqNM:AMCC - News) and Vitesse Semiconductor Corp. (NasdaqNM:VTSS - News) The situation facing Chartered Semiconductor is especially bleak, FitzGerald said. Market turmoil and a struggle to raise fresh capital in the face of mushrooming costs for new plant capacity threaten Chartered's future. Such heavy investments are necessary to remain competitive technologically. "Enhancing our manufacturing process technologies is critical to our ability to provide services for our customers," Chartered said in a voluminous filing on Monday in which it detailed its timetable on a planned $633 million rights issue. The danger is that Chartered is falling still further behind its arch-rivals in Taiwan. FitzGerald estimated that Chartered would fork out about $400 million this year on capital spending, just a quarter of what he forecasts TSMC to spend and far less than the $1 billion he predicts for UMC. "How do you keep up in this world?" FitzGerald asked. Fitzgerald also said he expected a wave of job cuts from semiconductor equipment makers, who produce the tools used to build and test microchips. Equipment makers have been hesitant to cut jobs during past downturns, FitzGerald said, but weakness has been so severe that job cuts are more likely.