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To: etchmeister who wrote (1225)	9/20/2006 11:54:30 PM
From: etchmeister	Respond to of 43017

A Turning Point for Semis May Be Just Around the Bend Wednesday September 20, 4:49 pm ET (I am posting this one to demonstrate how their brains work - unfortunately the author fails to make an attempt to use utilization rates to "calibrate" his opinion; nevertheless without providing a reason he somewhat turns bullish at the end of his blurb - they still need to come up with a new spin on how declining price for crude will impact consumer spending) William Trent submits: Our regular readers know we follow the orders for semiconductor equipment as a leading indicator of semiconductor supply, on the reasoning that more equipment to make semiconductors will lead to more semiconductors being made. We also believe that when supply is growing faster than demand, it will be bad for prices and lead to circumstances like Maxim’s (NASDAQ: MXIM - News) disappointing earnings announcement. ADVERTISEMENT Last night the semiconductor equipment trade organization SEMI released their latest equipment book/bill figures (for August.) Bookings were up nearly 70% year/year, while billings (installed equipment) rose 65%. Both growth rates are far higher than the 11.5% year/year growth in semiconductor demand in July. (August figures for semis are not yet released.) (btw most TW chipmakers/silicon island already issued sales data for August while this guy is still waiting for official SIA data) semidemand It is beginning to look like a turning point is near (bulls would argue we missed it last month). The enormous quantities of manufacturing equipment ordered over the last several months are now being installed, and will soon affect inventory levels. Meanwhile, the rate of growth for new orders is slowing down (and we believe some of the existing orders will be pushed back or canceled altogether). So the seeds to solve the problem are also being planted. We think a slowdown in consumer spending will affect the holiday spending on consumer electronics more than the market currently expects, and that this will cause a final (for this cycle) plunge in semiconductor prices in the relatively near future. After that, it looks like the clouds may finally pass.