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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (11033)	8/17/2003 8:27:11 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 95662

Cary, I like MXIM and LLTC very much for their Net Income which is as high or higher than MSFT without the associated litigation worries MSFT faces. My question is how much are you willing to pay for a company? LLTC currently trades at almost 20 revenues......a lofty valuation, though justified by its enormous margins. But any misstep and both of these could fall dramatically. Do you have any such worst case scenario for each, or both? TIA Brian

To: Cary Salsberg who wrote (11033)	8/18/2003 12:50:18 PM
From: Kirk ©	Read Replies (1) \| Respond to of 95662

Don't forget Maxim and LLTC have a stable of exceptional analog design engineers. These take 10 years or so to train well so having a stable of them already when the market bottoms is a competative advantage to deliver product quickly hence an ability to protect margins. I think their biggest threat is competition from China where the Chinese will steal $40K to $100K per license CAD software and pay their engineers far less in salaries. They could save $200K a year in design costs when you discount management contribution. They will also have an advantage of speaking Chinese to talk to many of the engineers that might be buying future chips for design. The US has the advantage for now as the product definition is still in the US where the equipment finds end use but this could turn. Of course, I'd expect the good companies to adjust by opening design centers in China and having the US staff train their replacements.