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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: SusieQ1065 who wrote (37817)	4/25/2003 10:05:18 AM
From: Frederick Langford	Read Replies (1) \| Respond to of 57110

SSB We are downgrading the semiconductor industry to Underweight from Marketweight for four reasons (in decreasing order of importance): 1. Customers' inventories have risen year-to-date, thereby temporarily inflating Q1 chip shipments above actual end-market demand. 2. There is evidence of recent end-market deterioration in white box PCs and handsets, particularly in Asia (a possible SARS impact). 3. Valuations are already discounting published estimates, in our view, and look expensive on an absolute and relative basis compared to the market. 4. Chip orders ordinarily soften over the next four months, which normally weighs upon the group from the May through October period. Order trends are typically the 'first order' effect upon chip stock prices. *We expect that the stocks will remain range-bound (SOX 250/260 to 340/350) until end-market demand improves. SOX is currently at the high-end Fred