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To: fooledalot who wrote (43785)	1/16/1999 10:14:00 AM
From: rupert1	Respond to of 97611

A bullish conference on semi-conductors bodes well for a stellar 1999 for boxmakers. This article courtesy of my CRUS thread friend, KevinR: ________________________ Get ready for next boom, say chip market observers By Will Wade PEBBLE BEACH, Calif.-- Despite the difficult year which just ended, there was guarded optimism in the air at the 1999 Industry Strategy Symposium here at this sunny golf resort by the Pacific Ocean. Not only was the weather nearly picture-perfect outside but industry executives were taking shelter in the belief that there is no place to go but up. Healthy growth in personal computer shipments, strong demand for cellular phones and the emergence of new digital consumer electronics--such as enhanced TV and set-top boxes--are not only reviving semiconductor growth in 1999, but setting the stage for the next round of double-digital increases in chip sales, according to Jean-Philippe Dauvin, group vice president and chief economist for ST Microelectronics, who is based in Paris. Like other executives, Dauvin remains cautious, but he now believes his 7% growth forecast could be on the conservative side of the 1999 recovery. "It's difficult to say whether 1999 will see 7% or 10% or 15% growth in the semiconductor market, but I am sure we are at the start of a long upturn that will take us through at least 2002,"predicted Dauvin, who is chairman of the World Semiconductor Trade Statistics (WSTS) organization. "Barring a global recession, 1999 could turn out to be a very good, possibly great, year," agreed analyst Bill McClean, president of IC Insights Inc. He also issued a conservative forecast in the low double-digit range, but noted that the period could turn out stronger than originally anticipated. During many of the forecast presentations, over-capacity in chip-processing plants was blamed for the chip industry's ills. "The capacity overhang was a major problem in 1998," McClean said. All forecasts called for a flat year of investments in fab capacity (see today's story). "Fabs take two years to build," McClean said, hinting that the relatively low levels of investments in 1999 will most likely lead to a shortfall of production next year. ST's Dauvin predicted an 18.6% cumulative average growth rate in worldwide semiconductor revenues over the next five years, with total sales swelling from $132 billion this year to $290 billion in 2003. Although the PC will remain the largest single chip driver, it will not consume as much of the total silicon pie as it has in the coming years, he told the audience at ISS. Dauvin said the market for semiconductors in computers will grow by an average of 19.9% through 2003 to reach $139 billion, almost half of the total semiconductor market. The telecom segment will increase 19.6% over the same period to just under a quarter of the total market in 2003, at $65.1 billion. The automotive and consumer electronics categories will round out the top four applications for silicon, both of which are seeing strong growth rates, according to Dauvin. The growth of dedicated or custom ICs will also explode, partly because of the rise of digital consumer electronics applications, which will require systems on a chip. Revenues for dedicated ICs will grow at a compound annual rate of 16.6% to $47.2 billion in 2003, and semicustom chips will rise 20.5% to $26.5 billion, he said. "This could be the first time that these two categories grow at the same rate as microprocessors, which will increase at 20.1% [to $60.5 billion]," he told the ISS meeting, which is hosted annually by the Semiconductor Equipment and Materials International (SEMI) trade group. DRAMs, which have been plagued by falling prices and too much capacity in the past three years, will grow a whopping 32.5% in the next five years, he said. The sharp growth will be driven by the cutbacks in fab spending and consolidation of suppliers during the past downturn. Dauvin predicts that DRAM revenues will reach nearly $60 billion in 2003 compared less than $14 billion in sales last year.

To: fooledalot who wrote (43785)	1/16/1999 10:24:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

fooledalot: ORCL cost me and millions others a lot of money early last year when it tanked to about $22 on concerns about exposure to Asia bringing the general market with it. Subsequently, CA followed the same route: lately SAP has been struggling. I don't follow ORCL, feel a bit uneasy about its Chairman. If I were investing in that group it would be with CA - which is a very volatile stock, but which will eventually return to about $60 sometime this year. I also like PSQL (rudedog's tip) for the medium term. I wouldn't worry about my views on CPQ. It is recommended by most of the investment community heavies. You will make money even at $46. Don't let my opinion cause you to delay - you may not get it cheaper. Calculate the risk of paying $46 now against the possible chance of buying it at $44 next week or having to pay $48 or more.