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

To: Kirk © who wrote (11062)	8/19/2003 1:22:12 PM
From: The Ox	Respond to of 95652

You have definitely suggested A in the past and your reasoning was sound. Nice trade and congrats. Those who didn't pay attention missed a nice opportunity. Worldwide DRAM Market Shows Signs Of Recovery - Gartner Tuesday August 19, 5:25 am ET BERLIN -(Dow Jones)- The global memory chip market is on the verge of recovery, research firm Gartner Inc. (IT) said Tuesday, after more than two years of recession swelled losses at the likes of Infineon Technologies AG . Worldwide sales of dynamic random access memory, or DRAM, chips are seen at $ 5.1 billion in the third quarter, a 38% gain from a year earlier, Gartner said. The analysts expect DRAM revenue to rise 22% to $18.9 billion in 2003. "This recovery is going to be based on lack of supply, not increasing demand," Andrew Norwood, principal analyst for Gartner's semiconductor research group, said in a statement. "We have been here before, and if the DRAM vendors become greedy and increase production, the industry will quickly swing back into oversupply and prices will crash." A recovery would be good news for companies like Infineon, Samsung Electronics Co. and Micron Technology Inc. (NYSE:MU - News) , which have suffered from the worst- ever downturn in the industry. It could also be critical for the survival of South Korea's Hynix Semiconductor Inc. , Gartner said. Infineon has racked up losses of more than EUR2 billion in the last two years, as prices for DRAM chips remained below the cost of making them. Gartner said prices in the spot and contract markets began to stabilize in the second quarter and have continued to improve. Average selling prices for the 256 megabit equivalent chip are expected to reach $5.55 in the third quarter, the research firm said. Norwood cautioned against inflated expectations. "The expected balance between supply and demand could easily swing back into oversupply if (Personal Computer) demand is not as strong as expected," he said. Still, Infineon is one of the best performers in Germany's benchmark DAX Index this year as investors bet on a recovery in DRAM prices. The shares have gained 67% since January, outperforming the DAX, which is up 22% in the same period. By 0852 GMT, the shares were up 2.7% at EUR11.65.

To: Kirk © who wrote (11062)	8/19/2003 2:08:57 PM
From: Cary Salsberg	Read Replies (2) \| Respond to of 95652

Hi Kirk, RE: "I'd love to see Cary or someone compare it on a valuation basis to AMAT and NVLS." I started working with HP in 1973, when I worked in the timesharing business. In 1976, my company became an OEM for the HP 3000 and 250, and later we were value added resellers, VAR. I long thought that there was a window when HP ws the best company ever. A was spun off from HWP, so that presents some problems. First, there isn't a long track record as an independent company. Second, in the spin off, bits and pieces were kept and others released. So, A consists of pieces that failed some sort of screening process by the parent company. Given that the spun off pieces have strong technology as the common characteristic, one can question the validity of the screening. HP was a technology company and it gained from its participation in almost every technology area. HP promoted "cross-pollination" and risk-taking, and benefited from the synergies afforded by its model. A has the tradition and some of the pieces, but it is uncertain if it has enough to duplicate the synergies. If I remember correctly, A has 4 divisions: chip test, instrumentation, biotech, and IC development. The market and investors don't like "conglomerates" and prefer to invest in pure plays. I think it is premature to compare A to AMAT and NVLS on a "valuation basis". The numbers, except for cash and debt, favor A, but the expected performance going forward must consider track records and greatly favor AMAT and NVLS. A is on my prospect list. Key varibles I watch are debt (hopefully 27% goes to 0%, after tax profit margin (close to 20% in good times), and sales growth rates (20% or higher when the economy recovers).