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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (10286)	6/9/2004 8:04:57 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 25522

UPDATE - TSMC May sales jump 29 percent to record Wednesday June 9, 6:58 am ET By Michael Kramer (Recasts, wraps in Goldman Sachs downgrade) TAIPEI, June 9 (Reuters) - Monthly sales at TSMC (Taiwan:2330.TW - News; NYSE:TSM - News), the world's largest contract maker of microchips, surged 29 percent to a record in May on demand for chips used in consumer electronics, but investors worry about a possible slump in the second half. Taiwan Semiconductor Manufacturing Co (TSMC) May sales report on Wednesday came one day after chief competitor United Microelectronics Corp (UMC) (Taiwan:2303.TW - News; NYSE:UMC - News) posted a 31 percent jump in May revenue on new capacity. Financial markets have largely ignored good news from the two heavyweights as investors fear 2004 may be a reprise of 2000 -- record results followed by a severe slump as demand evaporates in a broad economic downturn. "Oil prices, a slowdown in China -- people think this will all melt down into disappointing demand in the second half," said Nomura Securities semiconductor analyst Rick Hsu. China and the United States, Taiwan's two top export markets, are both expected to slow their economies later this year. While Hsu remains upbeat on TSMC's fundamentals, Goldman Sachs downgraded both firms to "in-line" from "outperform" on Wednesday, citing signs the highly cyclical outsourced chip manufacturing business was approaching its peak. TSMC's May sales reached T$21.72 billion (US$650 million), up from T$16.8 billion in the same month last year and April's T$20.6 billion, the previous record. TSMC, nearly one-fifth owned by Dutch group Philips Electronics NV (Amsterdam:PHG.AS - News), announced the results after the close of trade in Taipei on Wednesday. Its shares closed down 2.65 percent at T$55, and despite record revenues and gross margins near the company's most profitable quarters during the 2000 tech boom, the shares hover near an 11-½ month low reached on May 17. DEMAND FOR MICROCHIPS TSMC said in April it expected selling prices in the April to June period to show their first quarter-on-quarter rise in over a year. Shipments were forecast to grow nearly 10 percent, led by demand for microchips used in products like DVD players, video game consoles, and television set-top boxes. With demand outstripping supply, TSMC is also considering hiking its US$2 billion capital spending budget, which was increased from US$1.2 billion last year. Goldman Sachs analyst Donald Lu, who expects TSMC and UMC's business to remain strong throughout 2004 before easing in 2005, said the capital expenditure hike was a bad sign, however. "Historically, investors have often become cautious when TSMC's capex growth peaks, so TSMC shares and its capex have peaked at approximately the same time in the last few cycles," Lu said in his report downgrading the issue. "Since foundry (contract microchip maker) stocks tend to peak six to nine months before an earnings peak, we believe foundry shares have only very limited upside from current levels despite earnings expansions in the next few quarters," Lu wrote. Smaller players, like world number three contract microchipmaker Chartered Semiconductor Manufacturing (SES:CSMF.SI - News; NasdaqNM:CHRT - News), have benefitted from tight capacity among the two heavyweights, which account for more than 80 percent of the market for custom-made microchips. Chartered, which raised its quarterly profit forecast this week, still has room for growth as its production lines are running at 91 percent of capacity, compared to full utilisation at TSMC and UMC. (US$1 = T$33.5)

To: Cary Salsberg who wrote (10286)	6/9/2004 9:13:41 AM
From: willcousa	Read Replies (1) \| Respond to of 25522

The evolution of economies from the day the first seed was planted has proceeded just as it is proceeding now. As an economy becomes more capable the quality of its' jobs increases. Take farming. The consolidation of farms began with the pioneers. Some farms never made it. Those people either had to work for others or move to the city. As mechanical capability grew the ability of each farm worker was leveraged and farms consolidated. By the 1950's in the midwest (where farmland was relatively productive) one farmhouse in 3 housed a former farmer who had gone to work outside of farming. Today that number is about 3 in 5. The movement is relentless but in no way new. The same has been true for numerous industries. I think all know the movement of the textile industry from England to the U.S., from the northeast to the south, from the south to Japan and the like, from there to Taiwan and Hong Kong, from there to Indonesia, from there to Costa Rica, the Phillipines and Thailand. This is how economies evolve and it is repeated in every industry. Jobs go to where the product is produced the best - that means cheapest with acceptable quality. This gives the world in general the things they desire at the best price. It makes more goods and services available to more people at an affordable price. I don't think that is so bad. At the big picture level it might even be viewed as altruistic. At the same time millions of folks who were formerly living at a subsistance level are moving out of it, building self-worth, learning valuable skills, etc. The central issue here is whether the economic pie is finite or can be grown. If you believe it is finite we really cannot go much further.