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 : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Burt Masnick who wrote (72977)	2/5/1999 11:48:00 AM
From: greenspirit	Read Replies (1) \| Respond to of 186894

Burt and ALL, Article...Semiconductor prices seen rising, inventories falling - analyst... February 5, 1999 SAN FRANCISCO, AFX : The semiconductor industry cycle is moving into the "sellers' euphoria" phase where semiconductor makers will see price increases and lower inventories, according to Nationsbanc Montgomery Securities analyst John Joseph. Speaking at Nationsbanc Montgomery Securities Tech Week investors' conference, Joseph said the industry is now in a capacity absorption mode and in the early stages of a two- to three-year recovery. Joseph noted that capital spending in the industry is growing slower than capacity, historically an indication of an uptick in the semiconductor industry and a shift in the makers' favour. "The wind is now to our backs, and companies are in a better negotiating position in terms of who will set the price," Joseph said. He added that semiconductor end markets are growing faster than production of their components. Joseph forecast personal computer growth of 14 pct over the next three years, driven by the launch of new operating systems such as Microsoft Corp's Windows 2000 and the demand for internet use. He added that microprocessors used in PCs account for 55 pct of the total semiconductor industry. The growth in PCs should also be driven by increasing European penetration rates and a recovery in Asian and emerging markets. Demand for semiconductors used in communications is forecast to rise by 2002, led by growth in wireless communications, networking and data transfer, Joseph said. The analyst said he expects Intel Corp to report a first quarter EPS of 1.11 usd, reflecting a 3 pct decline in revenues in line with the company's guidelines. "But if PC shipments in February were as strong as they were in January, revenues could be sequentially flat," Joseph said. He added that Intel will benefit from an easier comparison from the year earlier period, and the launch of its Xeon Pentium III should boost earnings. Cost savings are also supporting margins on lower prices, Joseph said, but he expects Intel's average selling price to decline slightly, but stay above 200 usd. Joseph added that while semiconductor companies' shares are trading at high absolute valuations, relative to the Standard & Poor's 400 index, the "valuations are not excessive."