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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: michael liu who wrote (9036)	1/28/1998 8:25:00 AM
From: John Ritter	Respond to of 14577

I have tracked this sector as it has become oversold and feel there is value comparing SIII to ESST, both are down hard. ESST slide into the trenches because of a foundry contract that was written requiring ESST to accept and pay for all good production. The Chinese, being the good businessmen that they are, managed to greatly improve production causing ESST to take a huge ontime earnings hit. ESST has plenty of good chips to sell as a result which will probably reduce margins in this sector for at least the next quarter. Additionally they are in a product transistion and revenues have not ramped up, so explaining their dismal stock price with the sector hit including SIII. The question is perhaps, which sector play has the questest upside, ESST, SIII, or others. The thread might benefit from an anlysis of the uplying products and their potentail, perhaps there may be some buyouts on the horizon. I seem to recall that SIII management wanted to buy ESST, whatever happened to that, are their any other options? Will the major chip makers squeeze this nitch market, or will the growth of sound, video global markets be so strong in '98 that these two players will move back into a 20 to 30 percent growth mode? What factors are holding up this transistion beside internet access speed and the evolution of software and operating systems? Just some thoughts.