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

To: Lockhart who wrote (9115)	7/8/1998 6:41:00 PM
From: Rob S.	Respond to of 11555

AMD has been selling a lot of K6s and the K6+ 3DNow! parts are flying off the shelves - it is a hit with the consumer & gaming markets already. But slackness in the rest of the market will cause AMD problems. A lot depends on what they have to say. If they say great things about the prospects for competition against Intel, then IDTI might be spurred up regardless of general market weakness. Altogether, I am not looking for their report to change things much - the semi market is going to limp through the summer but may pick up this fall. I expect a very strong consumer retail market and a decent corporate PC market despite the shock of lower prices and money thrown at the service sector to fix the Y2K problems. Tuff summer, better fall/winter and probably a great new year.

To: Lockhart who wrote (9115)	7/9/1998 12:10:00 PM
From: Samuel R Orr	Respond to of 11555

This sports fan was watching the World Cup Soccer Semifinal when you wrote, but foresight is always risky anyway. If I'd have had to guess yesterday, I'd have said AMD might fall another two bucks, and I'd be tempted to buy some. It did, and I did. Your specific question was what effect AMD's faltering performance, at least from the Street's point of view, might have on IDTI. My guess, again, would have been that AMD's earnings shortcoming would not have affected IDTI much. It does tell me that IDTI's own earnings, due out the 14th, aren't likely to be a great positive surprise. They might be modest, indeed. What AMD's difficulty does tell me is that Intel has to be an unusually fine short right now. Of course, its price is going up and may continue that way, but sooner or later the fact Intel cut margins on products it, too, sells will come home to haunt Intel. The fact that Yahoo, with earnings of maybe $160M, now has a market cap of $9B, and that Lucent(which in my Bell Lab days was better known as uninspiring old Western Electric) is selling at 270 times earnings, tells me even more. Just what it tells me is better left unsaid. My long-term hope for IDTI is that after the market recovers, as it will, product diversification into several good areas will produce increased revenues. I think the WinChip will sell into the low cost PC market quite well if IDTi executes and can move processor speeds up to, and preferably beyond, 233 MHz. They won't make a ton of money on it, which was not the plan, but it ought to beat SRAM margins. If they don't execute and have to write-off package and equipment expenses, it may be a real drag on earnings. If you believe things like book value, IDTI is just about there, and I don't see how it can drop below the magical figure of Fugazi's five bucks. As they say, it's only money. Well, the World Cup Soccer Final takes place this Sunday, and it may prove to be as slow-paced as recovery in the semiconductor market.