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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (925)	8/1/1998 8:53:00 PM
From: Moominoid	Read Replies (1) \| Respond to of 3339

This week's amateur market technicians' sentiment survey has gone from 53% bulls last week to 63% bears. The SI survey still has more bulls. David

To: Les H who wrote (925)	8/2/1998 11:33:00 AM
From: Les H	Respond to of 3339

'98 Chip Dip Marches To Beat Of Its Own Drum (07/31/98; 3:16 p.m. ET) By Jennifer L. Baljko, Electronic Buyers' News While the latest correction that pounded semiconductor suppliers in the most recent quarter somewhat resembles what occurred during the infamous 1996 cycle, analysts were quick to point out the differences Thursday at a panel discussion in San Francisco with investors. Like two years ago, a PC slowdown in the first half sparked less demand for related components and created high inventory levels in the channel, said Elias Moosa and Arun Veerappan, analysts at BancAmerica Robertson Stephens. However, unlike the dramatic 1996 downturn when a supply glut left plenty of parts on original equipment manufacturers (OEMs) and vendor shelves, levels are low, and orders should start picking up now that executives in various segments of the electronics industry are seeing an end to the channel-stuffing that took place earlier in the year. There were also some other factors that came into play during the second quarter that exacerbated problems for chip vendors, they said. First, semiconductor companies had to deal with the Asian currency crisis and watch business drop in that region of the world. Additionally, with PC OEMs slowing down orders, fab capacity was freed up for the manufacturing of other parts, which considerably shortened lead times, Moosa and Veerappan said. But the Asian crisis seems to be fizzling in terms of its incremental impact on suppliers' bottom lines, and actually, several companies are starting to see a jump start in business there, added Veerappan. Despite the unfavorable market conditions that are likely to still pressure third quarter results, chip companies, particularly those in the communications and analog sectors, hold promise for growth, the analysts said. On the communications side, companies specializing there are just starting to leave the custom-designed application-specific integrated circuit stage and are migrating to the merchant market, which will open a number of opportunities for those in that space, said Moosa. Within that segment, those that concentrate on a Gigabit Ethernet silicon solution and broadband access should fare well in the near and long term, he said. Given the need of analog devices in many applications, these companies provide investors with stability and profitability, according to Veerappan. Because analog providers reach many markets, offer products with longer life cycles, are design-focused rather than manufacturing-centered, they tend to have higher gross profit margins than other semiconductor organizations, he said. On average, gross profit margins are in the 60 percent range.