Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (5017)	7/12/2004 9:43:08 AM
From: All Mtn Ski	Respond to of 5867

DJ UPDATE: Merrill Lynch Downgrades Global Chip Industry U.S. investment banking giant Merrill Lynch dealt a further blow to the idea of a second-half turnaround for the technology sector by downgrading the global semiconductor industry to underweight from overweight, saying chip stock prices may continue to decline. In a report Monday, Merrill said "at minimum, we think that semiconductor equities offer no upside from current levels." The downgrade comes just weeks after similar moves by other major securities firms. In mid-June, UBS downgraded the semiconductor sector to neutral from overweight due to worries the world economy may not be as strong as expected in the second half of the year. Merrill's concerns also focus on demand not picking up as much as expected in the second half. The firm said companies are not willing to hold as much inventory as expected, curtailing an inventory rebuild needed to sustain the investment banker's chip industry estimates and raising the risk the chip industry will move into oversupply in 2005. Further, more production lines are being built, which will increase the supply of chips on the market at the same time companies are becoming cautious about holding them. Merrill reckons chip industry capital spending will amount to 55% of industry revenue this year, up sharply from just 17% of industry revenue a year ago. "We believe that the risk of a material downward adjustment in the financial outlook for the semiconductor business is higher now than at any point since early 2002. Additionally, we think that we're closer to a peak in margins and earnings than we previously expected," the Merrill report said. The investment banking firm also revised down its forecast revenue growth for the global chip industry in 2005 to 6% from 16%, mainly due to weaker average selling prices and lower unit shipments. Accordingly, the firm shifted price targets on companies it covers to mid-cycle from peak-of-the-cycle valuations previously. The semiconductor industry is highly cyclical, with booms in demand cause for companies to spend billions of dollars on new production lines, which leads quickly to oversupply and falling prices. In the report, Merrill downgraded the share price targets of the following companies: New Target Previous MediaTek Inc. (2454.TW) NT$334 NT$460 Sunplus Technology Co. (2401.TW) NT$73 NT$80 Tessera Technologies Inc. (TSAR) US$20 US$24 Novellus Systems Inc. (NVLS) US$37 US$47 Photronics Inc. (PLAB) US$22 US$28 Staktek Holdings Inc. (STAK) US$8 US$12.5 MEMC Electronic Materials Inc. (WFR) US$12 US$14 Merrill made no ratings changes on the above companies. Some of the major companies downgraded by Merrill: New Rating Previous Agilent Technologies Inc. (A) Neutral Buy Applied Materials Inc. (AMAT) Neutral Buy ATI Technologies (ATYT) Sell Neutral Intel Corp. (INTC) Neutral Buy Micron Technology Inc. (MU) Neutral Buy National Semiconductor Corp. (NSM) Neutral Buy Nvidia Corp. (NVDA) Sell Neutral Texas Instruments Inc. (TXN) Sell Neutral Xilinx Inc. (XLNX) Neutral Buy ARM Holdings PLC (ARMHY) Sell Neutral ASML Holding N.V. (ASML) Neutral Buy Infineon Technologies AG (IFX) Neutral Buy STMicroelectronics N.V. (STM) Sell Neutral Advanced Semicon Engineering Inc. (ASX) Neutral Buy Chartered Semiconductor Mfg Ltd. (CHRT) Sell Buy Taiwan Semiconductor Mfg Co. (TSM) Neutral Buy United Microelectronics Corp. (UMC) Neutral Buy ST Assembly Test Services Ltd. (STTS) Sell Buy -By Dan Nystedt, Dow Jones Newswires; (8862) 2502-2557; dan.nystedt@dowjones.com