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

To: Jorj X Mckie who wrote (41085)	6/2/2003 8:17:29 AM
From: Techplayer	Respond to of 57110

an attempt to incert some rational thought by Barron's... 08:06 ET Barron's article cites concerns over surge in wafer starts in Taiwan : Barron's article focuses on recent development of a surge in wafer starts, which represents the measure of raw silicon wafers that head down the production line, peaking in Taiwan to a level that was previously set in Dec 2000. Fred Ramburg, a newsletter publisher on the chip industry, cites concerns over wafer starts in the first quarter being well ahead of forecasts, a possible "frontloading" of orders and lack of sustainable wafer start growth. He also suggests, "worldwide production of chips has returned to peak levels" with no real foreseeable necessity for a "massive buildup of devices". Given the lack of investor attention to the second half, he believes TSMC and UMC guidance and forecasts will begin to be "cautionary". Mr. Ramberg also claims INTC is starting to look for second sources for every equipment it purchases, which suggests further evidence of potential concerns by co over sustainable volume and pricing. 06:41 ET Intel shares might be priced too high in light of recent concerns over chip demand – Barron’s (INTC) 20.82: The article suggests INTC's recent stock price appreciation could be of concern given factors in Taiwan such as motherboard shipments dropping with very limited visibility. While Intel receives a very small portion of its revenues from motherboards, the co receives 80% of its sales from processors and related semiconductors which clip onto the motherboards. However, the co still maintains its forecast of $6.4-7.0 bln despite the recent concerns over declines in motherboard demand. The article describes the "gap" between INTC's expectations and motherboard manufactures and distributors large enough to drive a truck through. In addition, a Bear Stearns analyst predicts motherboard sales to be down 15% this quarter and suggests, "second quarter weakness is not priced into the stock". Intel reports its mid-quarter update this week. Now, the gap might not be big enough to get a semi through so there should be some more move upwards in the rally. :-)