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

To: Gottfried who wrote (22652)	8/7/1998 1:05:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Optimistic report takes contrary view of semiconductor market By Margaret Quan NEW YORK - A contrarian analysis of the semiconductor industry, due to be posted online tomorrow, predicts respectable to strong annual growth over the next three years for the semiconductor industry, which is now struggling through a downturn. The forecast by IC Insights Inc. and Fisher-Holstein Inc. expects 10 percent, 24 percent and 30 percent annual growth for the next three years. The report, "The Semiconductor Market Upturn: Surprise, Surprise, Surprise!" points to several market segments for evidence of a coming upturn, including the DRAM market, which shows signs of stabilizing after two years of rapid and steady price erosion. The report foresees overall semiconductor unit volume and average selling prices recovering later this year. The report makes several assumptions about the global economy and the electronics market: the Japanese economy will stabilize in 1999 and recover in the year 2000; other Asian economies will recover in the year 2000; European and U.S. markets will continue to show growth; and currency exchange rates will remain at 1998 levels. It also presumes no negative impact stemming from year 2000 difficulties. Authors Bill McClean, president of research firm IC Insights, and John Kanz, president of consultancy Fisher-Holstein, suggest that the industry upturn will soak up the market's present excess production capacity. Demand will grow to outstrip supply, and capacity shortages will again appear by 2001, sparking another rush to build, they said. The underpinnings of the upturn, according to McClean, is demand for electronics equipment, which is projected to grow 3 percent in 1998 and 9 percent in 1999. The factors are thus in place for the industry to return to its historical growth pattern, McClean said, as long as no unforeseen event occurs, such as a drastic decline in the yen's value. Manufacturers who stay the course during the present downturn will be in the best position to take advantage of the upturn, the report suggests. "Companies like Intel and IBM will stand out for having continued to invest during the downturn and will reap the benefits of existing capacity on line to meet customer demands, when some competitors will be unable to do so," the report concludes.

To: Gottfried who wrote (22652)	8/7/1998 4:30:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

GM/All, <<Bold emphasis mine>> I must admit that I'm surprised at the 12-month price targets of $95 for INTC?!?! We could be there this fall. Analysts bullish on chip stocks Group gains 4.5 percent on global developments By Binti Harvey, CBS MarketWatch NEW YORK (CBS.MW) -- Chip stocks rose Friday amid more indications the industry is making progress toward a turnaround. The Philadelphia Semiconductor Index, which charts leading semiconductor issues, has risen 6 percent over the past two sessions on optimism that the group has hit bottom. Semiconductors were one of the first groups to participate in the market correction, and their recent turnaround has sparked hopes that the PC industry is back on track. A report from the Semiconductor Industry Association late Thursday showed that semiconductor sales didn't drop as sharply in June as in previous months, which may mean industry fundamentals are improving. The organization reported that June global chip sales fell 14.1 percent year-over-year, and 2.2 percent sequentially. In May, sales fell 4 percent sequentially. June sales decreased 0.3 percent in the Americas, 1.9 percent in Europe, 3.6 percent in Japan and 3.7 percent in Asia-Pacific. Friday morning, several analysts made bullish comments on chip companies. Lehman Brothers analyst Michael Gumport upgraded Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD) to "outperform" from "neutral," and raised C-Cube Microsystems Inc. (CUBE) and Alliance Semiconductor (ALSC) to "buy" from "outperform."ÿ ABN Amro analyst David Wu also made positive comments on Intel, reiterating his "buy" recommendation and raising his 12-month price target to $95 from $90. Wu said memory chip manufacturers believe demand has risen for high-performance DRAM chips, which translates into increased production of high-end computers. Intel's high-end business should benefit from the increase in higher-priced PCs. Wu added that he expects the company to report an upside surprise in the third and fourth quarters as industry fundamentals improve. Adding to the upbeat mood regarding chip stocks, CS First Boston analyst Alan Rieper initiated coverage of seven semiconductor companies with buy and strong buy ratings. Rieper started Xilinx Inc. (XLNX), Maxim Integrated Products Inc. (MXIM), Linear Technology Corp. (LLTC) and Microchip Technology Inc. (MCHP) with "strong buy" ratings. Lattice Semiconductor Corp.(LSCC), Cypress Semiconductor Corp. (CY) and STMicroelectronics Inc. (STM) received "buy" ratings. Positive global development also boosted the group. One of Taiwan's largest chipmakers, Taiwan Semiconductor Manufacturing Co., said that although sales declined 16 percent year-over-year, revenue increased from the previous month. A plan by South Korea's major memory chip manufacturers may also help alleviate oversupply. The country's three biggest memory companies will temporarily stop production in August in order to stimulate demand and raise prices. NationsBanc Montgomery Securities analyst Jonathan Joseph is bullish on the group. "Markets have firmed up in China, the U.S. and Europe, and we have sharp cutbacks in capacity additions, which is the first step to reaching a bottom." "We like semis. We believe we're setting a bottom here and conditions are going to improve going into the fall and the next two years," Joseph said