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To: John Miz who wrote (4433)	1/6/1999 9:12:00 PM
From: Norrin Radd	Read Replies (1) \| Respond to of 9582

Comments I heard on CNBC in the last couple days from more than one guest were that the semi sector was probably in the first few months of a 2-3 year upturn. This sentiment has been echoed by many over the past couple of weeks. If true, this investing theme could make a fortune for those who buy into the sector now (or are already in).

To: John Miz who wrote (4433)	1/6/1999 9:47:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Chip-Equipment Makers Rise Amid Optimism for Demand Bloomberg News January 6, 1999, 2:23 p.m. PT Santa Clara, California, Jan. 6 (Bloomberg) -- Shares of semiconductor-equipment companies, including No. 1 Applied Materials Inc., rose amid optimism that demand for their products is rebounding as computer-chip makers invest in new technology. Applied rose 3 13/16 to 53 9/16 in trading of 22.5 million, making it the second-most active stock in U.S. markets. Applied is the fifth-best performing stock in the Standard & Poor's 500 Index for the past three months. Lam Research Corp. rose 1 7/8 to 27 1/8, and KLA Tencor Corp. climbed 1 7/16 to 54 1/16. Makers of the gear used in billion-dollar factories that churn out the most advanced computer chips are starting to see rising orders for new equipment. As demand for their products has improved, chipmakers have begun investing in new technologies and more advanced machinery to make faster and cheaper chips. ''We can see signs of recovery -- orders are improving and the top U.S. chipmakers are expecting strong results,'' said analyst Sue Billat of BancBoston Robertson Stephens, who rates Applied, KLA-Tencor, Novellus Systems Inc. and Teradyne Inc. ''buy.'' Novellus gained 7 1/2 to 66 1/16. Teradyne rose 3 3/8 to 49. Last year, suppliers of the equipment used to manufacture thumbnail-sized silicon chips were hammered by economic turmoil in Asia, where many large chipmakers are based, including the No. 1 maker of memory chips, Samsung Corp. They also were squeezed by slowing growth in the personal-computer market, which accounts for about 40 percent of all chip sales. Now, Intel Corp., the world's largest chipmaker, has said it expects to report sales in the fourth quarter that were stronger than initially forecast. Further, prices for memory chips, which had been plummeting, have become more stable and even risen for some companies. Excess supply that had hammered prices last year also has been cut back. Billat said U.S. manufacturers like Applied and the others will try to take advantage of weaker Asian competitors who haven't been able to invest as heavily in new technologies. Intel shares rose 6 1/4 to 129 1/2 in trading of 26.9 million, making it the most active stock in U.S. markets.

To: John Miz who wrote (4433)	1/6/1999 10:05:00 PM
From: DJBEINO	Respond to of 9582

Merrill Lynch's Kurlak said that depressed sales and earnings levels in the fourth-quarter relative to the year-ago period reflect still soft worldwide industry orders and lower prices for chips due to overcapacity. However, he said, "the cycle appears to have passed its low point." A strong seasonal recovery in personal computer sales in the fourth quarter is extending into the current quarter, Kurlak said, stepping up demand for PC-related semiconductors. Intel and Advanced Micro Devices stand to benefit from that increased demand, he said. Still, the majority of non-PC semiconductor products are not yet recovering. "We expect 1999 earnings results for the industry overall to be mixed and we remain mostly neutral toward this industry group. However, growth continues for communications and networking related chips makers and for Intel and AMD as PC demand is accelerated by the Internet," said Kurlak. Kurlak said he favors communications-geared names including PMC Sierra (PMCS) Vitesse Semiconductor (VTSS) and Broadcom (BRCM), We expect comments regarding the 1999 outlook from all three companies to be very positive. PMC Sierra rose 5 7/8 to 69 1/8; Vitesse rose 5 15/16 to 50 1/8 and Broadcom rose 25 1/2 to 158 3/8. In a CNBC interview Wednesday morning, Lam Research (LRCX) CEO James Bagley was upbeat about the profit outlook for the semiconductor industry for the first half of 1999. "The business will be better in the first quarter than in the September or December quarters," Bagley said. Bagley pointed to increases in capital spending by chip giants Samsung and Hyundai as indications of a potentially "substantial growth" and said he sees semiconductor usage accelerating. Lam shares rose 1 7/8 to 27 1/8. Among others: Intel (INTC) rose 6 1/4 to 129 1/2. Advanced Micro Devices (AMD) was off 7/16 to 27 1/4. Among the equipment makers, KLA-Tencor (KLAC) gained 1 7/16 to 54 1/16.Teradyne (TER) gained 3 3/8 to 49. cbs.marketwatch.com