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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (67082)	4/8/2021 1:35:44 PM
From: Elroy	Read Replies (1) \| Respond to of 78701

Yes, this semi boom will end with the double ordering creating large inventories at the device makers when supply loosens, followed by a dip in new orders until the device makers consume all the product they over ordered. That will be a weak period for semis. Who knows when that will happen? In SIMO’s case they are now gaining lots of share in PC SSD controllers, probably from the NAND makers internal controller divisions. The question becomes whether those internal controller divisions invest to regain the PC low end SSD slots in the future? I don’t know, perhaps not. PC SSDs should go ex-growth in about two years as SSDs almost completely replace disk drives in PCs. Hopefully the NAND makers’ internal controller groups pursue the high end growth areas in storage, and leave the low end cash cow PC space to SIMO. But yeah, the upside now is much less than when SIMO was in the high thirties in September 2020. But at that time I did not expect things to be this good. SIMO with a 2021 PE of 10x and growing 40% in 2022 after growing 18% last year looks like a juicey cheap growing highly profitable acquisition target. There aren’t any similar (high growth, high profit margin, low valuation) stocks that I know of in semiconductorland. MRVL, MCHP, INTC or AVGO could easily buy them for $130, and have it be immediately accretive to their EPS. I’m holding at least a few more quarters to watch the fun.