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Technology Stocks : Atmel - the trend is about to change -- Ignore unavailable to you. Want to Upgrade?

To: Michael Sphar who wrote (7967)	3/4/1998 5:23:00 PM
From: Frank Chen	Read Replies (2) \| Respond to of 13565

Bottom call: I called several months back on this thread that this stock could go to 10-15 before it really bottoms. At that time, lots of people thought that was insultingly low, and they ridiculed me. Well, looks like I'm going to get the 10-15 range to pick this stock up. This might be the bottom now. Several reasons: [1] Korea has stabilized for quite a while. News and other indicators suggest that the problem for ATML's Korean customers to get credit is partially resolved. Some of the customers are getting government credit guarantee on part of the purchases. Europe is coming back and contributing to higher percentage of ATML's total revenue stream. The U.S. economy could get better in the 2nd half. [2] Supply of flash and logic chips are dried out a little bit since the Asian crisis. Japanese and Koreans (also AMD and INTC) are cutting back on upgrading their equipments. In 3-6 months time, expect the supply-demand to be tilted to the other end. Pricing pressure is alleviating for ATML's product mix already. [3] ATML have ramped up the French Fab and got a pretty cheap deal on today's purchase of the German unit. They made some roads into the telecommunication and automotive segments. Revenue wise, I see sequential increase in the next 3-4 Q. Expect some possible write-off for the purchase today in next Q's earning. [4] Price of 10-15 probably is going to attract takeover. Considering potential sales of 1.3-1.7B in the next 4 Q for the company after the acquisition, per share sale is 13-17, and the book value should be at least around 7 after the combination. 15/sh is a pretty discounted valuation for a company this size. In summary, I think we're at the bottom of the cycle. I expect to pick this stock up at around 13-15. Of course, if I could see it lower, I would be happy. I think this is going to be a good price for a good company. Frank