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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Debt Free who wrote (19832)	6/2/1998 10:06:00 AM
From: Andrew Brockway	Read Replies (1) \| Respond to of 70976

Another chip forecast drops as price erosion spreads By J. Robert Lineback PHOENIX--Chronic overcapacity, fierce pricing competition and widespread uncertainty in the semiconductor industry continue to dampen revenue growth prospects in worldwide markets, according to Semico Research here, which has revised its forecast downward showing chip sales falling 1% in 1998. Last year, semiconductor revenues staged an anemic recovery, growing about 4% to $137 billion, after dropping 9% in 1996. "Pricing pressure has now overflowed into many other product categories like programmable logic, standard cells, microprocessors, microcontrollers as well as microperipherals," warned analyst Jim Feldhan, president of the Phoenix-based market research and consulting firm. In addition to lowering its revenue forecast, Semico has adjusted downward its prediction of semiconductor unit shipments to a 1.0% increase this year. The research firm now expects 256 billion ICs and discrete semiconductors to be shipped in 1998 compared to its previous forecast of 2.1% growth (or 259 billion units), which was issued last November. Other market research firms have also lowered their forecasts citing price erosion, a glut of production capacity--especially in memories--and continued weakness in Japan's economy. On Wednesday, the Semiconductor Industry Association (SIA) plans to release its mid-year forecast, based on recently revised numbers from the World Semiconductor Trade Statistics (WSTS) organization. A spokesman for the SIA hinted that the revised numbers will in line with recently lowered forecasts by industry analysts. Low average selling prices (ASPs) remains the chip industry's biggest problem, according to Semico. "The industry continues to experience extreme pricing pressure on memory, and as the cost per megabit declines, the bit growth rate will show about 90% for 1998," Feldhan said. "Micro logic will experience a dollar growth of 6% as we continue to see a shift to lower cost PCs and lower prices for microcontrollers and microperipherals." Semico said PC demand remains strong, and microprocessor unit shipments have tracked closely to the company's projections, but competitive conditions have kept processor ASPs low.

To: Debt Free who wrote (19832)	6/2/1998 2:06:00 PM
From: Paul V.	Read Replies (4) \| Respond to of 70976

In comparing the BTB #'s in 1996 with the prices we see that the funds started loading up with AMAT the last of July when the stock was at 21 5/8 but the BTB # was at 0.76. It's average BTB since 1991 was 1.0285 for the month of July. However, in 1996 during Aug. the BTB was 0.71, aver. at 1.01 with the price range from 23-$27. In Sept.the BTB was 0.70, aver. at 0.96857 and price range from $26-27. In Oct. the BTB was 0.78, aver 1.01 and price range from $26-$30. Then in Nov. the BTB was at 0.90, aver 1.03 and price range from $27-40. By Dec the BTB had moved to 1.01 but the price range stated in the range of 35-$40. But by Jan the BTB had gone to 1.08, then Feb. 1.07 at a price range $41-55. It looks like we will have to wait to about November before we get back to the the $40 range. With the conversions to the 12 in wafers, copper etching, etc. do we believe that the SEMI will hit the high BTB #'s it hit during the early months in 1995 when it hit BTB # of 1.32 in Jan., 1.41 in Feb. and 1.30 BTB in March. If so we could really have a tremendous jump in prices this next up cycle especially since we will be up against extremely low # the year before (1998). This also is reinforced due to the 3rd year of the Presidential cycle, with a median of 25%, the highest of the 4 year of a Presidential cycle. By the way the median for the 4th year of the Presidential cycle is at 16%, but we have the Y2K problem bearing down on us. Has AMAT taken the steps to correct the Y2K problem internally and in the manufacturing of it's products? During the 1st and 2nd years of the the median range was in the 5-4% area. If the Funds follow there previous trends then the last of July appears to be the price bottom for AMAT even though the BTB #'s may go lower. I agree with others on this site that it looks to me that the lows will be in the low $20's. Then, I believe that the Big Funds will jump in. Reactions? Paul