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Technology Stocks : Ring the Bell - When to sell semiconductors? -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (15)	1/26/2004 5:28:49 PM
From: The Ox	Read Replies (1) \| Respond to of 34

...The combined circumstances of greater fiscal restraint and the ability to quickly add incremental capacity mean that companies no longer need risk overshooting demand by a large margin; thus the pendulum mechanism that caused the industry to swing from rapid demand growth to massive overcapacity no longer ticks. "There will still be cycles, but not the huge gaps we have seen in the past," Jelinek said.... I disagree with the "ability to quickly add incremental capacity" statement. It still takes at least a half a year and more likely over a year to have the added new equipment come "on line", even if the shell and all other support mechanisms are in place. At least that's what most industry insiders say. The problem continues to be that with a one year lead time and everyone ordering at the same time, capacity gets added at the top of the cycle. I don't see how the cycle can end without some form of a bust?

To: Proud_Infidel who wrote (15)	4/26/2004 8:50:57 AM
From: Alastair McIntosh	Read Replies (1) \| Respond to of 34

Re: Uh oh, time to Sell? Boom-to-bust IC capital spending cycles to end Well, in hindsight it sure looked like a sell signal in Feb 2000. Message 12805595 An excerpt from the iWSJ: Semiconductor Industry Group Sees End to Boom-and-Bust Cycle By SCOTT EDEN Dow Jones Newswires NEW YORK -- Exploding demand for communications devices and a more disciplined approach to adding manufacturing capacity should help semiconductor companies avoid the boom-and-bust cycle that has plagued the business throughout its history, an industry trade group said Monday ... ...But mitigating any future cyclical slowdown in the semiconductor industry, said SIA president George M. Scalise, will be chip companies' increasingly efficient supply practices. Helped by rising dependence on outsourced manufacturing, better manufacturing methods and increased use of e-commerce, the average period it takes for a chip order to be filled is two weeks, down from an historical average of 14 weeks. That means potential shifts in demand won't result in swollen inventories, Mr. Scalise said ...