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

To: Cary Salsberg who wrote (11735)	10/15/2004 3:18:56 PM
From: Proud_Infidel	Respond to of 25522

Toshiba to Crank Up Chip Investments in Fy04 , 10.15.04, 2:29 PM ET Asia Pulse Pte Ltd TOKYO, Oct 15 Asia Pulse - Toshiba Corp. (TSE:6502) said Thursday that it has increased its planned investments in semiconductors to a record 179 billion yen (US$1.6 billion) in the current fiscal year, up 16 per cent from the initial plan, as part of preparations to manufacture chips for U.S. firm Xilinx Inc. Toshiba said it may raise the amount even further for its own products. The major Japanese electronics company also officially announced the same day that it will fabricate chips for Xilinx using the latest 90nm-and-smaller processing technology. Toshiba plans to prepare for this move by tacking 25 billion yen onto its capital investment plan. This includes 10 billion yen that it will receive from the midsize U.S. chipmaker as advance payment for the chips. "Although we cannot disclose the matter yet, we're considering raising the amount further," Toshiba Vice President Masashi Muromachi told reporters. Toshiba is believed to be considering additional capital investments for its own products such as large-capacity flash memory chips and integrated circuits used to drive LCDs (liquid crystal displays). (Nikkei)

To: Cary Salsberg who wrote (11735)	10/15/2004 3:35:05 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 25522

I have some conclusions from the JP Morgan report and the 4 conference calls. 1. There will be no semi and equip downturn as long as the eonomy is expanding. 2. The economy and the semi expansion will slow from time to time and the short term effect on some equips will be very significant. 3. The investment climate for semi equips is more difficult than in the past and more difficult than for selected semis. 4. The metrics for semi-equips need to be reevaluated. The book value at the bottom followed by a strong, rapid rise to high EPS at the top is no longer valid. The misuse of these metrics at "inflection" points has added to price volatility. 5. There has been some discussion of LRCX and NVLS and I think they illustrate what is wrong with semi-equips when compared to semis like ALTR, XLNX, LLTC and MXIM. The 4 semis are great innovators, but they are also great at maintaining the bottom line. LRCX has done very well at the bottom line, but they can't move beyond the niche established at their founding. NVLS has been second only to AMAT among US companies in innovation, but they are predicting up to a 50% EPS fall on a 25% fall in revenue and an 18% fall in shipments. NVLS must change its cost structure relative to revenues. LRCX and NVLS had 50 and 48% gross margins, respectively, compared to 77% for LLTC and the mid 60s for ALTR and XLNX. LRCX had $50M R & D cost on $419M revenue compared to NVLS $68M on $415M. NVLS hurts the bottom line and LRCX cancels its CMP program. Short term, LRCX looks better, but I like what NVLS is doing for longer term. Of course, NVLS will need to get significant profitable revenues from PVD and CMP to justify the hit to current results.