E
HA! I have a Cyrix P166+ (nutty notation) and I can relate to that stuff - my computer was always dying for inexplicable reasons. I narrowed it down to some dumb software and excessive heat in the computer. Things are a lot better now that I put an extra cooling fan in there. Still have to keep the cover off the case as there is still overheating when the outside temperature gets warm! Need another cooling fan for the case, which really is the crux of the problem - poor very poor design.
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Anyway:
Here's a scoop from the NY Times about TXN that actually paints the same picture that I've harped on for the last few months - (hint: BOOM TIME for the more specialized companies - LSI being one of them in my mind) (another hint: stay away from PC related for awhile.)
I like the TXN guy saying below: "But judging by what the market says, I'm the only one who is." - should remind you of a certain dufus's (me) recent babbling here! (semi-equips are bad, commodity semis are bad and non-commodity semis are good!)
Basically semis are a good investment for the next 12 months and 36 months - the next few weeks notwithstanding, come to think of it the next few months notwithstanding! (Clinton's back, Asia's back in the form of China, big company earnings look bad, Iraq, blah blah blah...)
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After Recent Lumps, Texas Instruments May Be Poised for Upturn
By ALLEN R. MYERSON
DALLAS -- Homas J. Engibous, the chief executive of Texas Instruments, wasted no time Thursday in putting an upbeat chip industry forecast delivered by his economist, Vladi Catto, in the right perspective.
"I'm always encouraged by what Vladi says," Engibous told about 160 analysts and money managers at his company's annual conference. "But judging by what the market says, I'm the only one who is."
He was alluding not only to the 12.5 percent plunge in Intel's stock price that day on a gloomy earnings outlook issued the day before but also to the 3.75 percent decline in his company's shares, to $52.9375. Motorola likewise warned late Thursday of disappointing earnings because of weak chip sales in Asia. But on Friday, Texas Instruments shares rose $1.5625, to $54.50.
Unlike Intel, Texas Instruments is becoming less and less attached to the personal computer industry -- a combination of good luck, years of planning and efforts by Engibous since he became chief executive at age 43 less than two years ago.
Only one of the company's 10 largest customers makes personal computers, down from about 6 of 10 in the early 1990s. Today, the largest customers for the company's chips are Nokia, Ericsson and other telecommunications manufacturers.
Engibous has bet the company's future on specialized chips, called digital signal processors. While these chips are used in computer components like modems and hard drives, they are finding rapidly growing markets ranging from cellular telephones, computer networking equipment and cars to talking dolls and precision scales used in fishing tournaments.
As in any yard sale where someone else is not paying for the move, Engibous has sold off some items that were valuable but too heavy to take along. The military electronics business went to Raytheon, the laptop computer business to Acer.
For investors willing to differentiate among semiconductor stocks, Texas Instruments appears to be better poised to resist the industry's afflictions. While the first quarter looks weak enough to justify some caution, the rest of the year might be almost as encouraging as Engibous hopes.
Over recent months, analysts, with the company's guidance, have been trimming their first-quarter estimates to less than 50 cents a share from 66 cents a year earlier. They cite Asian financial turmoil and slower growth in demand from American customers in businesses including personal computers. The company's current weakness and short-term outlook account for a decline in its stock from a peak of $71.25 on Oct. 13.
The full year, and next year, are different stories. Though the current price-to-earnings ratio hovers around 70, analysts' expectations of a rebound for the full year mean that the ratio based on forecasts of 1998 earnings is only about 22. For the semiconductor industry as a whole, Catto said, last year's 4 percent growth in revenue, constrained by a nearly two-thirds drop in prices for memory chips, will rise to 10 percent this year, then 20 percent to 35 percent next year, as memory chip prices recover and Asia rebounds.
The glut of memory chips, or D-RAMs, is likely to subside later this year because Japanese and Korean makers have sharply cut their investments in new plants and equipment. The prime beneficiary will be Micron Technologies, whose shares rose $1.5625, to $34.5625, on Thursday even as other semiconductor stocks fell. Micron, which specializes in memory chips, is challenging Samsung of Korea for the largest share of the market.
Analysts and investors continued pressing Texas Instruments on Thursday to unload its memory chip business, a steady money-loser that even in good times remains highly volatile. Engibous refused, as usual, to make any promises.
But just watch what he does, not what he says. Abandoning a previous strategy of sharing the memory chip risks through joint ventures, he has recently sold the company's interest in a partnership with Acer of Taiwan and ended the Twin Star joint venture with Hitachi of Japan. The Twin Star plant, near Dallas, could be converted to making digital signal processors.
These chips, which are much less versatile than Intel's microprocessors but much faster, translate inputs such as sound and light into the ones and zeros of digital signals in products like cellular phones, automobiles and camcorders.
The growth in sales of these chips has consistently exceeded 30 percent, with Texas Instruments growing even more rapidly, controlling about half the market. "We don't use the word dominate," Engibous said, his manner about as coy as a tornado. "But we're trying to get more and more every day."
Texas Instruments thus argues that it deserves better treatment from investors than they are giving Intel.
And some analysts are advising nervous investors who still want to play technology stocks to look at Texas Instruments. "There has been a lot of money in Intel that will be looking for another home," said Michael Gumport of Lehman Brothers. "The Texas Instruments story is much more compelling."
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