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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (15215)	2/1/1998 2:03:00 AM
From: Ian@SI	Read Replies (2) \| Respond to of 70976

*OT DRAM Prices OT*** GM, You asked, Lehman provides... Ian. Today's Date : 1/30/98 ------------------------------------------------------------ * DRAM PRICING MIXED FOR PAST WEEK; 16 MBITs FLAT/UP, 64 MBITS FLAT/DOWN. ------------------------------------------------------------- DRAMs: 16 MBITS INCHING UP; 64 MBITS STILL MOVING DOWN. 16 Mbit DRAMs were flat/up for the past week. A big boom in pricing 2 weeks ago gave way to a flat trend and now another slight uptick. Meanwhile, 64 Mbit DRAM pricing is still moving lower. 64 Mbits are still priced at more than the normal 4-5x premium over 16 Mbit devices, but the spread has substantially narrowed and we would expect 16 Mbit and 64 Mbit prices to move pretty much in parallel now. We note that MU-$33 13/16-4 has been a big beneficiary of the upsurge in DRAM pricing. We see no need currently to change our below consensus EPS projections, and we would view news on DRAM pricing next week (after Chinese New Year) as much more meaningful. AT THE MOMENT, ABOUT 2/3'S OF WORLD DRAM CAPACITY IS ON HOLIDAY SCHEDULE, 1/3 OF WORLD DEMAND IS ON HOLIDAY SCHEDULE, AND THIS WEEK'S SLIGHT UPTICK IN 16 MBIT DRAM PRICING CANNOT BE TAKEN AS CONFIRMATION OF AN UPTREND OR EVEN STABILITY. PROCESSORS: STEEP DECLINES; CLONES DOING WELL. Pentium family prices are down steeply in line with INTC's-$82-3 cuts early this week. We continue to be struck by 2 facts: 1) The unusually steep pace of decline (which, in part, reflects INTC's success in moving to low cost 0.25 micron output and, in part, the presence of competition), 2) AMD's parts continue to sell at a good premium to list and in line with spot targets. Discussions with NSM-$27-2 earlier this week confirm that they received at least $60-70 on average for their GX processors (sold exclusively to Compaq) last quarter, about 30% above our expectations, and their new Gx-MMX will go for over $110. AMD continues to have major production uncertainties and, in the interim, customers have turned to IDTI's-$13 1/16-2 new Centaur chip; we are receiving first reports of favorable customer reviews on Centaur. IN A NUTSHELL: PHASE 3. Despite Asia/Pacific fears, the U.S. economic backdrop remains very favorable. A rebound from distress tax selling (phase 1) and a setback on tough 4Q EPS reports (phase 2) has now given way to renewed chip stock buying (phase 3) as we enter the seasonally strongest period for orders with the group still in the lower quartile of their historical valuation range. Some signs of order uptrends have already emerged, but much of the buying has to be called conceptual since 1H98 trends look relatively weak. We expect a summer setback followed by a stronger rally in late 1998. Our focus remains on the most profitable companies with the best momentum and/or those with a long term improving trend in gross margins. Chip Prices: NECX Flash 1/29 16M TSOP $12.88 8M TSOP $ 5.05 4M PLCC $ 4.00 2M PLCC $ 3.48 1M PLCC $ 2.13 Chip Prices (Cont'd) p.2 NECX SRAM 1/29 32Kx8 SOJ (15ns) $ 0.75 128Kx8 SOJ (20ns) $ 1.60 DRAMS AICE --% CHG VS.-- NECX 64MBITS 01/29 1WK 2 WKS 1MO 01/29 Sync 4Mx16 $18.67 0.0% 0.0% -11.8% $--.-- Sync 8Mx8 $19.20 0.0% 0.0% -11.2% $--.-- Sync 16Mx4 $23.46 0.0% 0.0% 0.0% $--.-- 4MX16EDO $22.95 -6.1% -6.1% -6.1% $--.-- 8MX8 $17.14 0.0% 23.5% -10.1% $--.-- 16MX4EDO $15.81 -7.7% 6.1% 1.4% $--.-- 16MX4 $17.60 -6.7% -6.7% -14.2% $--.-- 16MBITS Sync 1Mx16 $4.44 0.0% 0.0% 28.0% $-.-- Sync 2Mx8 $3.52 0.0% 0.0% 50.1% $-.-- Sync 4Mx4 $3.67 4.0% -2.9% -7.7% $-.-- 1Mx16 EDO $3.23 0.0% 0.0% 46.9% $2.75 1Mx16 $2.76 8.0% 8.0% 15.5% $2.85 2Mx8 EDO $3.32 0.0% 0.0% -.-% $2.55 2Mx8 $3.16 -3.1% -3.1% 26.2% $2.65 4Mx4 EDO $3.65 8.1% 8.1% 61.1% $3.60 4Mx4 $3.62 4.5% 4.5% 42.0% $3.70 4MBITS 256Kx16 $2.30 0.0% 2.4% 11.7% $2.30 1Mx4 EDO $0.80 -7.0% 3.9% 12.8% $0.77 1MX4 $0.88 -6.9% 22.4% 14.4% $0.77 LIST AICE -------% CHG VS.-------- NECX PENTIUM SURVEY 1/26 01/29 1WK 2WKS 1MO. 1/29 P2-300 $530 $592 -4.1% -18.2% -17.0% $529 P2-266 $375 $384 -8.3% -20.6% -20.6% $365 P2-233 $268 $272 0.0% +0.8% -3.2% $267 P6/Pro-200 (256k) $487 $469 0.0% -3.3% -3.3% $441 P55C-233 (MMX) $193 $224 -17.6% -21.5% -22.4% $189 P55C-200 (MMX) $123 $141 +2.2% -32.6% -32.6% $121 P55C-166 (MMX) $ 95 $104 0.0% -5.6% -5.6% $100 K6 (ESC - small lots) K6-233 $138e* $172 -16.7% ----% -18.7% $166 K6-200 $ 92e* $165 -0.1% ----% -5.8% $155 e*- assumes a roughly 25% discount to Intel Pentium/P55C processors.

To: Gottfried who wrote (15215)	2/1/1998 6:15:00 PM
From: Jacob Snyder	Read Replies (12) \| Respond to of 70976

I'd like to poll the thread: What are your best guesses for AMAT's price: 1. low for the rest of 1998 2. high for the rest of 1998 3. at end of 1998 4. at end of 1999 My guesses, in order, are:22,40,40,60. I'll tabulate the responses in one summary post, with averages. Then I'll re-post it at the end of 1998 and 1999, for our collective amusement, education,boasting, or chagrin. Maybe we should make this a quarterly event, just before earnings come out. My guess is that the upcoming earnings and cc will say about what the other semi-equips have said: "we are meeting expectations now, but are just beginning to see the effect of East Asia's crisis on our balance sheet and bookings." Reports by KLAC and NVLS did not move those stocks out of their trading range, and I don't expect AMAT's will either. A while ago, I posted "the shape of the bottom", and I think things are a little clearer now. We'll have to wait till next earnings season, in April-May, before any possibility of breaking above our 26-33 trading range. The market is very wary, and wants clear reassurance that all the bad news is out, before we see any upward momentum. The sharp upturn will begin this year, but maybe not till the very end. In the meantime, there is about a 50-50 chance of staying in the current trading range, versus another step down. All the bad news is not yet out. Try this on for size: tomorrow, Indonesia defaults on it's foreign debt, the country collapses into social/political chaos to match its economic chaos, there is a further run on all the weak East Asian currencies, this pushes several of the largest Japanese banks into bankrupcy, Japan's stagnation becomes a depression, China (the bigger one) floats its currency, and then...... This exact scenario may not happen, but it is very plausible. Something like it, or as bad, will probably happen sometime in the next 6 months. Then we'll see the bottom. I'm going to sell nothing, and buy 40 call LEAPS exp. 2000 or 2001 on downturns. Anyone know where historical price charts for LEAPS are posted? AMAT and the S&P 500 are right now at the top of their trading ranges. It's a good time to sell, and wait for 26 AMAT and 900 S&P, if you're a trader.