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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (47780)	3/28/2004 6:05:56 AM
From: energyplay	Respond to of 74559

SMTC is priced at 9 times sales (okay 8 if you subtract out the 2.47 cash per share) which is really high for a small, third tier semiconductor company. Here's what is not widely appreciated about the analog side of the semi biz: Barriers to competiton are getting lower, and everyone is getting into each others business, driving prices down. This has been disguised by rising volumes, which enable better fixed cost and overhead cost spreading, temporarily preserving margins. When National, Fairchild, or even Intersil or Elantec goes after one of Semtec's market....Godzilla vs. Bambi. SMTC won't go away - I expect the valuation to come way down, however.