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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: johnny boy who wrote (8857)	6/11/1998 8:44:00 PM
From: Charlie Tuna	Read Replies (2) \| Respond to of 11555

Hey JB How about some GooD NeWs ATM and IDTI: techweb.com Hang in there dude and stay away from deliverance type canoe trips ...

To: johnny boy who wrote (8857)	6/12/1998 12:13:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 11555

Call it what you will. IDTI is not going to go bankrupt. National is structured much differently than IDT. National has lots of commodity products that are being hit by Asia. They sell a lot of product into the mid to low-end PC & consumer stuff and compete with several Asian companies on a lot of it. The lowering of currency valuations directly effects their sales and bottom line. That isn't the case with IDT. NSM bought up Cyrix and have overall lost money making uPs. Cyrix's was a large and very difficult part to manufacture. They also have had to invest very heavily into new facilities and processes and have major yield problems. They still get the bulk of their manufacture from IBM which costs them about 1/3 more than their own manufacture should (if they could produce them and get adequate yields). IDT has yet to prove that their "formula for success" will work but the game plan sounds reasonable. It's extremely challenging - with any errors in execution posing serious threat. They can't afford major delays in ramping production or ramping speed grades. IDT has bet a large portion of their future growth on the WC but they have not "bet the farm". If the WC fails, the excess fab capacity would be hard to fill for 2-4 years with other products in their pipeline but it would still be "state of the art" and able to crank out parts using 0.35, 0.25 and smaller geometries. The communications and microcontroller market sectors that IDT does well in will continue to be among the fastest growth sectors in the IC industry. And new products such as CL will just start to come up to speed in 1999 and 2000 with new product families. Over the next few months things might look even worse for IDT, and it might be dragged down by the general conditions of the semi industry. The semi industry is in another major round of "dis-inflation". The PC market has matured and no new operating environment requires much greater performance as was the case with each earlier version of Windows. The drop in Asia is altering the price structure of many commodities and has some effect on unit demand. But the IC market is not drying up. IC companies continue to ship greater quantities of parts but at lower prices that dampens the immediate prospects for sales growth. The market leader, Intel, charge nearly as exorbitant of prices for each marginal improvement in design and speed grade. Their sales and margins will decline and that will weight the sector. And then, the stock market had reached a point of speculative froth propelling many stocks to new highs. Some stocks with little prospects for earnings any time this century were being bid up to unrealistic levels. And most analysts had thought that tech stocks, although being high, were the place to be. The market psychology and cash flows had reached the point that it had about no where to go but down. So a lot of things came together at once to cause the decline in the semis. But sure as the tides rise and fall, the tech stocks will rise again as well. The underlying growth in electronics demand is not that bad and should move forward into next year. The liquidity problems in Asia were long overdue. The Asian semi whores were hell bent on building huge capacity on borrowed money in order to take over DRAM and other markets. Now they have huge debt and commodity products that sell near the cost of manufacture. As a result, the majority of the Asian semi whores are in no position to invest in the next round of facilities needed to produce competitive parts in late 1999 or 2000. The overbuilt capacity won't dry up overnight but the industry should return to a more healthy supply/demand situation by next year. IDT's prospects look clouded at this point because we have had broken promises and disruptive markets. The outlook is for fierce competition in the uP market. And growth of IDT's other products won't be enough to pick up the slack until at least the end of the year. The immediate prospects hinge on the WinChip 2. But IDT won't go bankrupt. That is a joke.