Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: TREND1 who wrote (37825)	8/25/1998 8:42:00 PM
From: Fabeyes	Read Replies (1) \| Respond to of 53903

--->Wonder how MU will do tomorrow ? Larry, Let's see quite a few shares today but not much advance -- should go down -- I might look for it to go up (HA!!) MU never does do what is should.

To: TREND1 who wrote (37825)	8/25/1998 10:24:00 PM
From: DJBEINO	Read Replies (4) \| Respond to of 53903

chip stocks and equipment stocks should not be put together. AMAT problems confirms that NOBODY is ordering new equipment, meaning production cuts , FAB closing, and higher DRAM prices

To: TREND1 who wrote (37825)	8/25/1998 10:25:00 PM
From: DJBEINO	Respond to of 53903

10:42am EDT 25-Aug-98 Lehman Brothers (Michael A. Gumport, CFA 1(212)526-) ALSC Semiconductors: Caution -- DRAM Prices Slip Today's Date : 08/25/98 ---------------------------------------------------------------------------- * DRAM prices slip. * We still believe the industry is bottoming and fourth quarter will be significantly better, but renewed downturn in commodity prices is a serious short-term warning. Downward short-term stock price bias is now likely. ---------------------------------------------------------------------------- CAUTION: DRAM PRICES SLIP. Our survey of DRAM traders continues to show DRAM price upticks, but our actual company sources now confirm that prices have begun to slide about 5% during the past few days. In particular, OEM demand appears stable or rising but sales to aftermarket vendors for PC upgrades has moved markedly lower. Nobody likes the volatility of DRAM prices, but those who ignore the swings do so at their peril. This key commodity indicator of trends at the margin in the chip industry has changed direction. WE STILL BELIEVE THE INDUSTRY IS BOTTOMING AND 4Q RESULTS WILL BE SIGNIFICANTLY BETTER. HOWEVER, IT SEEMS CLEAR BUSINESS AFTER A GOOD JULY HAS PAUSED IN AUGUST. In addition to the news in the memory sector (which is causing management at Alliance Semiconductor -- ALSC - 2 5/32; rated 1 -- in particular to turn more cautious), it appears August was less robust at Xilinx (XLNX - 39; rated 1). With U.S. holidays about to begin, U.S. industrial production in decline in recent months (the best chip order indicator), European holidays not yet ended, and Japan in distress, it seems unlikely any substantive positive news will emerge during the next few weeks. We see the industry in a "pause" mode short term with a negative bias. RECAP OF RECENT FUNDAMENTAL TRENDS. Big PC makers IBM and Compaq were back in the market as processor buyers in July after an absence earlier in the year. Low-end processors have been in short supply, and prices have moved up -- which should help processor margins and bolster sales, though September remains a key month. In the power sector, Siliconix (SILI - 20 1/4; not rated) sees sales flat this quarter and up next, a pattern reported by others. Xilinx, Lattice (LSCC - 31 1/2; rated 2), and Altera (ALTR - 37 11/16; not rated) in the advanced programmable logic device (APLD) sector all see flat sales, but it appears that after a strong July trends turned softer at Xilinx, most notably in Japan. C-Cube Microsystems (CUBE - 18 5/16; rated 1), a key digital video play, sees up sales this quarter and an acceleration next quarter. STMicroelectronics (STM - 62; rated 1) has not given up on the possibility of delivering flat sales (though down slightly is more likely). Texas Instruments' (TXN - 57 3/4; rated 1) chip sales still look down about 5%, but higher DRAM prices are mitigating the impact on profits. Advanced Micro Devices (AMD - 17 5/16; rated 2) seems increasingly optimistic about processor sales (3.7 million increasingly likely), and it appears our model's estimated 7% decline in its other businesses is too pessimistic. BOTTOM LINE: The decline in industrial production (the best indicator of chip orders) and shortfall announced by early reporters is contributing to pressure on the group; we still believe the group is "bottoming." Assuming resumed us economic growth and a stable stock market, chip stocks should rebound sharply in upcoming months as low priced PCs move into high volume for Christmas. Notwithstanding that belief, it seems likely upcoming weeks will be rugged. Message 5587342