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

To: Donald Wennerstrom who wrote (53505)	8/31/2011 2:35:55 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95596

Here is a longer term look at the Solar stock(s) performance using ETF TAN fund as the baseline. The chart starts on 15 Aug 2008, so the length is just over a 3 year period. TAN, starting around 25 dollars in Aug fell as low as 5 dollars in Nov 08 for about an 80 percent loss. Since then it recovered to about a 60 percent loss in 09, but since then it has been drifting downward to again reside at the -80 percent level. Shown on the chart, the S&P-500 also dropped off starting in 08, but has since recovered to nearly the 08 level. WFR also has a solar segment in the company and is shown for comparison to TAN. Its performance is similar to TAN, but even slightly worse. Overall, for the past 3 years, the performance of the solar sector has been "awful", and who knows when it will rebound. We see articles all the time lately "slamming" this area for loss of gross margin, over supply, etc. You name it, and the market doesn't like it. Some day it may become a robust sector again, but who knows when that will be.

To: Donald Wennerstrom who wrote (53505)	8/31/2011 4:11:42 PM
From: Jacob Snyder	1 Recommendation Read Replies (1) \| Respond to of 95596

<solar...continued pressure on gross profit margin> Driving margins down for cell/module makers: 1. industry overcapacity 2. falling ASPs margins up from: 1. falling poly prices (which will probably drop to 25$/kg sometime in 2012; there is zero chance poly prices stay above $50) 2. demand elasticity, which is creating new demand in the U.S., China, elsewhere 3. continuing technology development, which increases efficiency and lowers manufacturing costs 4. capacity being taken out, as the weak companies die In addition, if sales go up enough, profits can go up, even if margins decline. 2011 will be another record year, for MW of solar installed globally. Overall, it's hard to say whether gross margins go up or down from here. Guidance has been sparse and mixed, giving no clear picture. I'm fairly certain the huge declines seen QoQ in 1Q11 and 2Q11, won't be repeated in 3Q11. I'm also fairly certain, we won't see any huge improvement in margins either, till more capacity is taken out. Margins will be modestly up or down in 3Q11. I'm not sure why he makes a distinction between cell and module makers. All the big cell-makers are vertically integrated, and do modules too. And, in another year or two, they all plan to be making their own poly and wafers. The article "paints with a broad brush", and makes little distinction between individual companies. That's typical, of the superficial business press: when a sector is out of favor, everything is hated. So, for instance, FSLR had gross margins of +37% in 2Q11, while JASO's were -3%. That's a big range of results.