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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: David Rosenthal who wrote (6994)	9/20/1998 10:13:00 PM
From: Ian@SI	Respond to of 10921

Dave, I could almost accept every statement made in your last post if you hadn't started with Compaq and generalized from there. I used Compaq to illustrate that the PC market is having trouble maintaining growth and has resorted to pricing that requires more unit sales then the market can sustain (thus their current lack of profitability). The argument then extrapolates the effects of oversupply ... CPQ was the PC growth leader. That title now belongs to Dell. If I were to "... use Dell to illustrate that the PC market is growing at an unprecedented rate and has had continuously rising ASPs until its last reported quarter while unit sales exceed wildest expectations, .... "; I would expect to laughed off this thread. It is just as wrong to take the industry's star player as it is to take a struggling Compaq and then generalize from its current performance. Yes, there is excess capacity. I have no idea when demand will catch up to current capacity. But just because this sector unwisely and massively overbuilt does not change the fact that more units are being sold. The only bright side for investors is that lower prices make more applications of technology viable as well as making existing applications of technology affordable. I see this as accelerating unit growth compared to what the long term trend would have predicted. One estimate indicated that 25 Fabs needed to "die". Well we've had 2 or 3 fires in Taiwan and another 1/2 dozen announcements of impending shutdowns as well as numerous delayed builds. I wish I could bring evidence that business is picking up again. The INTC preannouncement of a strong quarter is encouraging but not evidence. MU announcement that it was able to raise memory prices will, I suspect, be a fleeting hope rather than a sustainable increase. Nonetheless, those were two slight glimmers. It's becoming conceivable that mid-99 may very well be a late date for the start of the recovery rather than wishful thinking of the most bullish optimist. FWIW, Ian.