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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: jim A who wrote (3400)	4/7/1998 12:36:00 PM
From: db	Respond to of 6180

Japan, Asia make up about 30% of TI Semi sales. There big DSP catagories are modems... chipsets for 3COM 56Kbps modems, cell phones and base station modems, they own like 80% of the disk drive DSP motor controller market and of course there is the consistent money loser DRAM's, which is getting to be a smaller part of the revenue not due to TI's lack of trying more than falling ASPs (there volumes are actually increasing a lot, though we will see what happens now after TI-ACER and TwinStar) The point is in all of these there is bad news in the "past". Most of it associated with Asia or lower PC prices. In 1Q98 we will see the continued effect of DRAM losses, plus a charge for the TI-ACER pull out. I am not sure who they will deal with TwinStar, but it might actually be additive since they got a super-deal from Hitachi. Hitachi ended up taking a nice fat write off for the fab. But TI gets all the capacity/equipment. Right now First Call has TXN at 0.44 1Q98 with 0.39 as the low. I have figured closer to 0.25 depending on the 3COM inventory clean out and how quickly TI is switching its fabs over to DRAM shrinks. But really at $52 this is in the market. The REAL key is the same thing that was important in the MOT conference call. Everyone knew earnings was going to suck. But what is the future like. TXN is expected to earn $2.31 (14% increase) in 1998 and more aggressively $3.24 (30% increase) in 1999. I worry about the 1999 more than the 1998 since people seem to have already start pricing tech on 1999 potential. So TXN needs unviel in its APRIL 15th call (why TAX DAY!) a plan for DRAM... are we in or out, and if we are in WHAT is the PLAN to make money SOMEDAY? DSP what is lower $10 DSP's from ADI doing to the market. What's the plan for there high dollar general DSPs? How is it going to compete against new ASIC's with embeded DSPs. Will they come out with DSP core IP... like the ARM RISC CPU. What about embeded DRAM technology on DSP's... this is still a few years out... but if they stay in DRAM's do they have a plan... And final the JV's are they in any imediate financial trouble, and if they need to liquidate what is TI's liabiltey. They seemed to sckate out of the last three (remember TI-Alpha in Thialand early 97) relativie easily. They actually did well on the Hitachi deal? But what about KTI, and TECH what is the possible laibilty. It TI answeres these questions and shows analyst they have distinct plan for the expect 30% EPS growth for 1999... TI will reach new highs... mid-80's... if the muddle through ignoring the tough questions or waiver on the DRAM issues letting analyst imagination run wild TI will stary in its current $50-$60 range...