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

To: Donald Wennerstrom who wrote (11799)	9/24/2003 11:40:24 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95530

Here is a market assessment by the CEO of CY published today in the IBD. cypress.com {snips} <<In the plenary address at the 50th International Solid State Circuits Conference, Gordon Moore restated what most of us in Silicon Valley know: Moore's law has ahead of it at least a decade of progress -- that's four technology generations -- and another factor of 20 in cost. If our competitors don't like the 2 microcent transistor, they really won't like the 0.1-microcent transistor.>> <<The last two semiconductor cycles, which included two terrible downturns, had amazingly similar phases that followed this pattern: A brief unit-volume crash, precipitated by end-market demand (PCs in 1995 and datacom/Internet in 2000). A one-year period of low volume and severe price erosion. A one-year pseudo-recovery with rising unit volumes and low prices. A second crash inflicted on a weak semiconductor sector by some external event (the 1998 Asian currency crisis and the Enron scandal plus the 2002 recession). A mild recovery with high unit volumes and low prices. A boom with very high unit volume, product shortages and slightly rising prices. Our company is now in phase five: We will ship 150 million units this quarter, approaching our all-time 2000 peak unit volume of 157 million units, albeit at only 60% of our peak revenue due to low prices. The aggregate semiconductor industry unit volume is currently down only 8% from its all-time peak.>> <<Since 1986, we have had four share price peaks that were separated by 1,214, 1,363, and 1,491 days. We are currently 1,204 days into the fourth cycle. The timing and magnitude of the share price peaks fall almost perfectly on a straight line. Other semiconductor companies and our industry also show similar, highly nonrandom cyclicality.>> <<The modest recovery of 2003 so far is not a result of a rebound in the still dormant datacom market. Over the last two years, consumer electronics has filled in much of the hole left by the dot.com collapse.>> <<I predict the modest recovery of 2003 will turn into the boom of 2004-05 after the datacom market returns to even modest consumption.>> <<The dot.com era promises of Internet growth were exaggerated, not wrong. Internet traffic, which drives a plethora of silicon-based equipment, has increased every quarter, but invisibly, because the new equipment installed has come from warehouses, not factories. Sometime in the first half of 2004, the slack in that rope will play out, tightening the connection between semiconductor supply and demand. In this technology upturn, we stand at the middle of the beginning, not at the beginning of the end.>> Don

To: Donald Wennerstrom who wrote (11799)	9/25/2003 7:53:33 AM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 95530

Don, That chart cannot be correct. cross-currents.net I saw that in Barrons (Alan Ableson's column). It looked wrong then too. I don't see how margin debt can go from long term average of approx $7B to the highest point ever ($26 B) in a single leap. I also don't think it can be now higher than it was in year 2000 when stock prices were much higher and day-traders were running amok. So I will not base any decisions on that graph. My conclusion is that most people have learned the danger of over-use of margin, and those who didn't have had their accounts closed by now. Anyway, it will be the labor report that will determine the direction today. Sarmad