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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (5497)	5/21/1998 1:02:00 AM
From: TI2, TechInvestorToo	Respond to of 10921

brief.com panel discusses $1000 PC impact on semi's: StreetBeat is designed to provide you with additional insights on the market from recognized financial experts on (and off) Wall Street. Please note that the views and opinions expressed by the panelist below are not necessarily those of Briefing.com. Topic: Semiconductors ------------------------------------------------------------------------ Panelists Robert Toomey, Vice President, Equity Research at Piper Jaffray. Krishna Shankar, Semiconductor Analyst at Donaldson Lufkin & Jenrette. Q&A Briefing: How has the emergence of the sub-$1000 PC changed the competitive landscape in the semiconductor industry? Robert Toomey: I don't think that it has really changed the competitive landscape very much. Winners are still winners whether it is a $1000 or a $3000 PC - and the winner is Intel. So far, the Intel clones like Advanced Micro Devices and Cyrix (part of NSM) have not demonstrated that they can scale up to the volume that is needed nor have they shown that they can advance technology as fast as Intel. Krishna Shankar: Overall, the sub-$1000 PC has been good for the industry. While there were concerns that its emergence would cannibalize sales in the high end of the market, that has not proven to be the case. Instead, the sub-$1000 PC has elastically expanded the PC market by introducing new users, and making it more affordable for households to own a computer, and in many cases, more than one computer. Similarly, it has induced additional penetration into international emerging markets. In terms of competition, brand recognition is not as important to consumers in this segment, and to sell a PC for under $1000, processors have to cost less than $150. Subsequently, Advanced Micro Devices and National Semiconductor, which recently acquired Cyrix, have been among the biggest beneficiaries of the growing popularity of sub-$1000 PCs. With that said, Intel is still a prominent force to be reckoned with as it is effectively re-focusing its efforts on the sub-$1000 market. Briefing: What is your outlook for DRAM pricing given the threat that Micron will level a new set of dumping charges against Japan and/or Korea by the end of the first quarter? Robert Toomey: My outlook for DRAM pricing is choppy in a flatish trend for the next 3-6 months. I expect to see prices rising following that time frame, with the risk that prices could go up sooner on the anti-dumping issue. I think that Micron is justified in going after Japan and Korea, however, I also think that DRAM pricing will probably sort itself out faster than the legal bureaucracy, thereby rendering the suit moot in terms of pricing. Krishna Shankar: I am cautiously optimistic. During December, prices collapsed because inventories were being sold at firesale prices by Korean manufacturers attempting to raise cash at any cost. Now, inventory levels and production capacities in both Japan and Korea have dropped off, but Taiwan is still producing large quantities. At best, the worst may be over, but I don't see a sharp spike in prices. Rather, it is likely prices will stabilize near current levels. Briefing: Which chip makers are the most vulnerable to the problems in Asia and how long do you anticipate that Asia will be a concern for these companies? Robert Toomey: In general, the most vulnerable companies are the ones with the highest costs. Companies in the high unit growth areas of networking and wireless telecomm will suffer less from Asia than those in the PC area. If we have a broad-based slowdown in world GDP and in capital spending because of Asia, all of the semiconductor companies will feel it. Intel has already said that gross margins are under pressure and that they expect margins to be pressured for the next 2-3 quarters. I think that Asia will be a concern for at least the next 6-12 months. Krishna Shankar: Intel has a fair amount of exposure since Asia has been its fastest growing market over the past three years. Others that appear vulnerable to some extent include Texas Instruments, National Semiconductor, Advanced Micro Devices, Xilinx, Lattice Semiconductor, and Altera. Overall, U.S. semiconductor companies are in a better position because of their limited exposure to the DRAM market. Yet, the recovery in the industry is likely to be back-end loaded. While estimates call for 10%-12% revenue growth in the worldwide market, it looks like we'll see a weak first quarter, and be left to hope for a strong second half of the year. Aside from Asia, we are still seeing good demand in Europe and the United States. Briefing: Which stocks are you recommending and/or avoiding? Robert Toomey: I have a STRONG BUY on TriQuent Semiconductor (TQNT) and Micron Technology (MU) and an ACCUMULATE on Electro Scientific Inds (ESIO). Krishna Shankar: Unfortunately, I am not at liberty to make specific recommendations in this type of forum.

To: SemiBull who wrote (5497)	5/21/1998 8:19:00 AM
From: Mason Barge	Read Replies (1) \| Respond to of 10921

I can't remember where I got the info on SFAM's 12% workforce cut, I'm sorry. I think it's old news, though. I could be wrong -- I wasn't paying that much attention -- but I'm pretty sure it was SFAM and I read it somewhere yesterday.