To: Cynic 2005 who wrote (16611 ) 10/1/1998 4:13:00 PM From: Zeev Hed Read Replies (1) | Respond to
MMV, if WFR survives, then it will participate in supplying the building blocks of the chips' business. If WFR does not survive, you will not even see $20/share and we should know within two three quarters. I think that we will have ample time buying WFR, for those that want it at prices under $6, which is still much lower than the $10 share I was forecasting for WFR last November when the stock was well above $25/share. The whole argument at the time was, "where one find a 10 bagger", and that is when I said, "wait until WFR gets to the low teens and by the end of 2000 it should reach $100. Since last November a lot of red ink has flowed through the street and planned capacity in the far east has been reduced as well as closure of existing capacity is taking place. All that will not change the fact that the total yearly shipment of chips will exceed $200 Billion annually sometime in the next five years. If the ratio of wafer costs to total chips sales stay roughly the same (wafer costs should actually become a greater portion of total cost) at about 5%, you get a very rough estimate of $10 Billion in potential (back of the envelop) demand. Assuming that WFR is still around, being the second largest wafer supplier, it should command at least 13% of that market. Veba is looking at the same figures when they are trying to decide whether to stay in the business or not. I do not see what is "glib" in these assumptions.
