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

To: Justa Werkenstiff who wrote (5715)	6/6/1998 2:26:00 PM
From: Jacob Snyder	Respond to of 10921

from 12/97 Semi Roundtable: "Impacting short-term investment risk are (1) the weakness in DRAM pricing, (2)over-capacity, (3)uncertainty over the costs and timing of the 300 mm conversion,(4) fluctuations in global spending on electronic and Information Age products, and (5)the Asian financial crisis." 1: DRAM prices continue to fall at a rate indicating overcapacity, not Moore's Law. Noone is making money making 16 or 64-bit DRAMs, some players are idling capacity, but no major companies have exited the business, yet. The Korean government wants to pump subsidies into their DRAM industry, to support exports at a loss. This indicates they haven't learned anything yet. They are still pursuing market share rather than profits. 2: overcapacity has spread from DRAM to foundry and maybe CPUs as well. 3: 300 mm transition has been pushed out, definitely. We'll see pilot plants 1999-2001, big orders for large-scale production after that. 4: recession in Japan means a large decrease in demand for chips, which puts pressure on semi companies margins everywhere. Last December, there was hope that Japan was finally pulling out of their endless stagnation. That hope is gone. At best, demand in N.America and Europe will partially pick up the slack. 5: the Southeast Asian liquidity crisis has become a East Asian solvency crisis. Also, countries from Brazil to Russia are being forced to take desperate measures to defend their currency and banking systems. Japan, Korea, and China are still trying to fix things by exporting their way to prosperity. Structural reform has just begun, and most governments are still in denial. The U.S. taxpayers/voters have not yet started to complain about american money being funneled through the IMF to prop up insolvent asian companies/banks that continue to dump in U.S. markets, hurting our industries and ballooning our trade deficit. I guarantee this will be a big issue in the next presidential election. So, to sum up: everything that was uncertain in 12/97 is now certain, and has turned out badly. And there is more bad news to come.

To: Justa Werkenstiff who wrote (5715)	6/7/1998 7:01:00 AM
From: shane forbes	Read Replies (2) \| Respond to of 10921

(semi-equips in popular press, market overall has corrected enough n/t - rally time?) Justa: Have you noticed that semi-equips have been in the popular press recently? I just looked at a Smart Money article, you had the forbes article, are there others? This means that the drops are being recognized. Might be a good sign - then again the contrarian in me tells me that the popular press never gets it right and the stocks will drop further (large caps esp. - the smaller semi-equip caps have been pasted too much already - many are trading very very reasonably - actually the large caps are much more reasonable now). However, in contrast to this contrarian view I get a feeling the market has corrected enough for the n/t. Way too many stocks (in various sectors) are dirt cheap now. This bodes well for a n/t rally. Since semis attract the traders, at any bit of good news (need to wait for earnigs possibly or some sign of recovery in PCs), zoom up they go and unless the market has learnt to differentiate between semi-equips and semis (or within the semis themselves!) - not bloody likely yet - both sectors might show a good n/t(by end June) or i/t (by mid-Aug) bounce. Sunday morning optimism for you bullish folk... shane.