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

To: Czechsinthemail who wrote (13706)	3/4/2004 8:26:47 AM
From: The Ox	Read Replies (1) \| Respond to of 95383

Doomberg-more negative spin: Intel May Lower Sales Forecast as Laptop Chip Demand Slows March 4 (Bloomberg) -- Intel Corp., the world's biggest computer-chipmaker, is facing slowing growth for the laptop semiconductors that helped the company last quarter report its biggest profit since 2000. Notebook computer makers in Taiwan are slicing orders for chips after last year's surge in demand tapered, J.P. Morgan & Chase Co.'s Christopher Danely wrote this week. That will probably lead Intel to say today that first-quarter sales won't meet its highest estimate of $8.5 billion, according to analysts at Banc of America Securities and Prudential Equity Group Inc. ``A significant portion of the laptop demand was sated in the fourth quarter,'' said Cary Nordan, who helps manage $14 billion at BB&T Asset Management in Raleigh, North Carolina, including Intel shares. ``There is some anxiety about the trajectory of technology spending this year.'' A lower sales forecast by Chief Financial Officer Andy Bryant may be a harbinger of slowing sales growth at the Santa Clara, California-based company. Lower laptop sales have a disproportionate impact on Intel sales because the chips that go into them are more expensive. A Centrino mobile-chip package for laptops costs as much as $496, compared with a standard desktop Pentium 4 at $417. Centrino The Centrino laptop chip was the centerpiece of Intel's marketing and sales efforts last year. The company spent $300 million advertising the chipset for wireless laptops to help push the notion of mobile computing. Notebook shipments by Taiwanese manufacturers will probably fall 13 percent in the first quarter from the fourth period, more than double the average annual drop of about 5 percent, Danely wrote in a note to clients this week. A combination of factory shutdowns over the Chinese new year and lack of demand for laptops after the Christmas period helped damp demand for Intel chips. Laptop chips make up about 20 percent of Intel's sales, Danely said. Intel in January forecast sales for the first quarter of $7.9 billion to $8.5 billion and analysts including Prudential's Mark Lipacis expect the company to narrow that range. It would be the first time in three quarters that CFO Bryant has reduced the company's forecast. The company last quarter reported a 22 percent surge in sales to $8.74 billion and net income of $2.17 billion, its highest in a quarter since 2000. Sales of $8.5 billion in the current quarter would be an 18.7 percent gain over the same period last year. May Miss Estimate The notebook shortfall may also cause Intel to miss its estimate for a 60 percent gross margin, the percentage of sales left after subtracting manufacturing costs, Pacific Crest analyst Michael McConnell wrote. Intel spokesman Robert Manetta said he wouldn't comment on what the company plans to say in the update. Danely cut his rating on Intel shares to ``neutral'' from ``overweight'' on Monday, saying that semiconductor demand will peak next month. Intel's sales growth will continue to slow after topping out last quarter, Danely wrote to clients. That prompted debate about whether slipping demand is a one- quarter phenomenon or the start of a trend. Intel shares have dropped 9 percent this year, compared with a 1.5 percent decline in the Philadelphia Semiconductor Index. The shares fell 56 cents to $29.04 in Nasdaq Stock Market composite trading yesterday. Intel shares more than doubled last year as researchers predicted a broad increase in spending for computer-related products from laptops to software and services. The Semiconductor Industry Association is calling for 19.4 percent growth in chip sales this year, and Gartner Inc. raised its forecast to 23 percent last week. Big Drop The ``big drop'' in notebook demand is ``a short-term issue, and the underlying economy will continue to improve,'' Banc of America's John Lau said in an interview from San Francisco. Lau rates Intel shares ``buy'' and said he doesn't own them. Thirty analysts suggest buying the stock, 10 say hold and none recommend investors sell, according to Bloomberg data. Intel and competitors are counting on an economic recovery, investors said. Companies already have wrung out any possible cost cuts from their businesses to shore up results in 2003, they said. That means the economic pickup needs to hold steady to keep boosting profit this year. Advanced Micro ``We need to see the consumer and the enterprise follow through with strong spending,'' BB&T's Nordan said. Intel may have one other advantage. The company has added products with thinner, 90-nanometer wires that allow engineers to fit more wires on a chip. That means Intel can make and sell its semiconductors for less than competitors such as Advanced Micro Devices Inc., which has said it won't have 90-nanometer wires until the end of this year. The newer manufacturing also will limit Advanced Micro's recent gains in the server-computer market, investors said. ``AMD is always just a flash in the pan,'' said Brett Crawford, who helps manage $5.5 billion at Mesirow Financial in Chicago. The firm owns Intel shares. ``People get excited about them pulling ahead, but it never lasts. The gap between them and Intel, especially in terms of manufacturing, is just huge.''

To: Czechsinthemail who wrote (13706)	3/4/2004 10:37:42 AM
From: Return to Sender	Respond to of 95383

From Briefing.com: MCHP to shelve plans for China assembly plant - AmTech (28.23 +0.09) AmTech says they discovered an interesting quote from Microchip's CEO in a trade publication story, which reported that the co was shelving plans for a China assembly plant; while this is a chip assembly plant and not a fab, firm says it is still somewhat odd for the co to already think about curtailing plans for expansion -- especially for a co like Microchip that derives its higher gross margins from being a low-cost manufacturer; firm speculates that perhaps there is more to be read about the co's true outlook for their business based on such a decision, rather than any "color" associated with a mid-qtr investor presentation. Factory Orders -0.5% vs -0.6% consensus 8:53AM Schwab Soundivew cites concerns over Cree; reiterates Underperform 23.56: Schwab Soundview notes industry trends for Cree are unfavorable and reiterates its underperform rating. The firm highlights concerns it received on its Taiwan trip regarding Nichia's unexpected price reduction of white LEDs for wireless applications by ~40%. Firm believes Cree's customers will need to meet Nichia's price move regardless of that co.'s motivation. Massive Taiwanese blue LED chip supply & licensing dynamic make the ASP environment hostile in 2004 as blue/white LED average selling prices could erode another 50% over the next 12 mos. 7:48AM CEOs are back in a hiring mode -- WSJ : The Wall Street Journal reports that chief executives at some of the biggest U.S. companies say they are back in hiring mode, a new survey shows, but it isn't clear whether they will create jobs on a large scale anytime soon. The Business Roundtable, an association of CEOs at big U.S. companies, said the latest quarterly survey of its members shows they expect "steady improvement in economic conditions" and "modest job growth." According to the article, in the latest survey, 45% of the CEOs predicted steady U.S. employment for their companies in the next six months, and 22% expected a decline. finance.yahoo.com I'm actually thinking about trading ISIL if it gets near 24.50 again. I just am not comfortable with the way the market is acting. Good luck Baird. Thank you everyone for taking my cautionary thoughts as just that and nothing more. I have no crystal ball to predict the future. All I have is a little technical and indicator analysis instead. I have been wrong so often that I have lost count. I just don't want to lose money due to being overly bullish at the wrong time. RtS