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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (52776)	7/15/2011 5:41:59 PM
From: Sam	1 Recommendation Read Replies (3) \| Respond to of 95761

FWIW, I have made no secret of the fact that I believe that Sandisk, as the only pure play in NAND, belongs in any "semi growth portfolio." The piece below is from the Sandisk thread, and is one reason for that belief. Another reason is that Sandisk is the technological leader in NAND. The Solid State Drive Handbook — The Transformation of Storage DANIEL AMIR- Lazard SSD is a big theme. In this report, we take a deep dive into the Solid State Drive (SSD) market. We see storage and particularly SSD as one of the major themes on Wall Street for the next few years. This report provides a guide for investing in the space. We anticipate that the storage market will go through a dramatic shift from HDDs to SSDs that will lead to new players emerging. In this report we focus on NAND producers, controllers, drive makers and module companies in the PC, enterprise, and mobile space. SSD are seeing a CAGR of 40% through 2015E. Based on our analysis we expect the SSD market to grow 40% annually through 2015. We believe that by 2012 SSDs will consume 14% of the NAND market. The key point for wider adoption is a decline in GB ASPs. We believe ASPs will reach $1/GB in 2H12 for consumer applications which will be the tipping point for wider adoption in integrating SSD into notebooks. Enterprise SSD is here now. We believe that the enterprise market has reached a stage of wider SSD adoption as both are gravitating toward better performance, smaller form factor and lower power devices. While we are seeing different plays on the market, e.g., SATA, SAS, PCI Express etc., we believe there is significant potential for system vendors. The critical part for success in enterprise is the ability to perform error correction at the controller level. Leading hardware players like EMC, HP, IBM, and NetApp are pushing the market toward SSD adoption in both servers in data centers and storage. We expect the enterprise SSD market to grow 250%+ in the next three years to nearly 7M units in 2013. PC SSD is where the volume exists. We expect the PC SSD market to grow 300%+ in the next three years to 60.7M units in 2013. We see Apple leading the way with the “ultra slim” notebook category. The demand by the consumer for instant-on, lower power, mobility and smaller form factor should lead to wide success of SSD in PCs as NAND prices come down. We expect this to occur in 2012. In addition, we see the adoption of “cloud” as a driver for SSD, rather than a hurdle, as it is likely to lead to less local storage (no need for 1TB HDD) and more adoption of SSD (a 128GB SSD drive). Mobile embedded NAND units to reach 1B by 2014E. We see the rise of NAND in handset and tablets as another indicator of SSD success. While embedded NAND is technically not exactly a SSD, we include it in our report as we see the transformation of embedded NAND into form factors like eMMC increasing in the next few years. This will also help adoption of SSD into the PC and enterprise space. We see these two areas consuming more than 40% of the NAND supply capacity in 2012. Investment derivatives in our space. SSDs are relevant to many of our names. Overall, we believe that in the long term the vertical business model such as that of Micron (MU-BUY), SanDisk (SNDK-BUY), and possibly Intel (INTC-NEUTRAL) will lead these companies to be successful, as having the NAND component will be critical for driving costs down. We especially see SanDisk as potentially well positioned following the acquisition of Pliant as it has the building blocks in both the PC and enterprise side to be an important player. However, in the near- and medium term we believe the market is ripe for many niche solutions especially in the enterprise space with companies such as Fusionio, STEC, Anobit, and possibly OCZ if the Indilinx acquisition is successful. We also believe there is a significant market for NAND SSD controller vendors such as Marvell (MRVL-BUY) leading the way followed by LSI (LSI-NEUTRAL) and niche controller players such as Silicon Motion (SIMO-BUY) or SandForce.

To: Jacob Snyder who wrote (52776)	7/16/2011 1:21:28 PM
From: Kirk ©	Read Replies (1) \| Respond to of 95761

Great list. Point I want to debate: 2. Companies like QCOM, MSFT, and CSCO don't make either list, because they are big and mature enough to pay a dividend like INTC, but their management is insufficiently investor-friendly. Their cash flow tends to get wasted (= not returned to shareholders) via failed acquisitions, failed attempts to enter new markets, or employee stock options. They are too big to be likely to grow (either the company or the stock) much in the future. I would rather hold XOM (Exxon) or KMB (Kimberly-Clark) than QCOM or CSCO. MSFT A year ago msft had 8.76B shares outstanding and paid a 2.1% dividend as of last quarter, MSFT had 8.43B shares outstanding and pays a 2.4% dividend at a higher share price. That seems shareholder friendly to me. MSFT is now in Q1-2012 where it has a PE of 9.7 and PEG of 0.9 That seems a good value. Look at kids in the teens... they use XBox rather than TVs. Last week I saw a 15yr old relative watching a movie via xbox with a headset . He was talking to a friend while watching. What really blew me away is he had the movie using maybe 75% of the screen as it showed a movie theater with two avatars watching the movie... so he was wasting VALUABLE screen resolution to see avatars..... very odd... until you figure out the social aspect was more important than the actual movie quality. Anyway... Apple is big now because in the 1980s and 1990s they gave PCs to schools or gave schools a great rate. All those GROWN kids now love Apple products since they were indoctrinated to think of them as these great things the teachers fawned over... just like kids are indoctrinated into teacher's social beliefs... another issue.... Anyway, I think MSFT will be very big when these teens are in their 20s and 30s and consume video and other stuff using their xboxes.... CSCO Well hated now. Might be time to buy for a trade and if they don't become more shareholder friendly, sell half when they fill gap #2 and and the rest at gap #3. QCOM Don't follow but they named a stadium after themselves so that usually guarantees a decade of under performance.

To: Jacob Snyder who wrote (52776)	8/8/2011 4:03:13 PM
From: Jacob Snyder	1 Recommendation Read Replies (2) \| Respond to of 95761

The cycle top is in. After reviewing many 2Q11 reports, and conf. calls, in semis and semi-equips, I'm now about 80% sure we are at or just past the cycle high for fundamentals. And past the top for stock prices. The KLIC report is an example of the trend. They reported multi-year record sales (294M$), but warned of sharply lower sales next quarter (165M$). GAAP EPS for the last 4 reported quarters was $2.48. For comparison, their 2000FY EPS were $1.93. It doesn't get better than this. EPS next quarter will probably be about $0.25 (my guess), compared to $0.95 just reported. Gross margins peaked at 48% 2 quarters ago, and are now in a downtrend. On the CC, KLIC refused to give any guidance past September: ...there is no secret here that the industry, the semiconductor industry generally is being cautious. There is a lot of (macroeconomic) factors that are not too preferable right now. I think everybody is taking a [fairly prudent] stance on technical equipment... ...the sequential decline in revenue is really attributed to our ball bonder business and especially from our OSAT customers being more conservative and rescheduling orders...or reducing their capital expenditure plan for the rest of their fiscal year... ...the general sentiment that we can relay in the news is the sentiment of caution from the consumer demand, which is not only in Europe and the US but also in Asia. That's what's driving slowdown in our demand... ...So it's a cyclical business. We all know that... The sharp fall-off in revenues is not company specific: (from CC)...In wedge bonder, we are basically significantly higher than that and for copper, as I've said many times, we are dominating the space. There is no official data for copper but largely, I mean, we have a very significant market share. We have the best solution available in the market that provides the best cost of ownership for customers and their performance....I wouldn't say sole source but I would say we dominate... From here on out, I will be shorting semis and semi-equips more aggressively than recently. I'll probably use KLIC as my shorting vehicle, or possibly MU or SNDK. I may also short UAL (airline), NFLX (the bubbly cloud), and/or JPM (big bad bank). It'll be time to go long KLIC and other semi-equips, when QE3 is announced. Wait for it. Closed my KLIC short today, nicely profitable Message 27552950 Started buying solars today: Message 27552077 disclosure: over 90% cash