Funny you should mention a common language. If you talk to the engineers at Texas Instruments, a good portion of them woul be sprinkling cheese and red peppers on their "Slices" instead of pouring syrup on their Wafers. But alas, their is that elite group of snobs in this industry that believe all ICs are built upon substrates, which sounds second class to me like sub-standard. That is of course unless it is the name of a sandwich (subs). Whoops, my stomach is growling now and I am hungry. I wonder why.
Back to the basics. The volume on WFR is up slightly which seems to support your observation. WFR has held onto its own and you are extremely astute in pointing out the book value situation. the last time we had a disconnect like this was when both ASYT and LRCX were selling in the single digit arena. Needless to say both are much higher today, even with the market reversal of late. ASYT is close to $24 and LRCX is close to $33. Our readers now this for a fact and some even took advantage of it.
I think we are looking at the same thing here, even with capacity issues at both the vendor and end user level. The rags to riches may come further down the road for this company, but not that far down the road. Right now we are looking to stem the red ink caused by low orders and huge overhead expenses for their facilities. The slightest bit of recovery in wafer starts across the industry has a huge ripple effect to reducing operating losses. Other than photoresist suppliers and other chemical providers (all of which are buried under a mmuch larger corporate umbrella), I can think of no other commodity supplier that can experience such a turn around.
I have an order in at $8.25 which almost guarantees it will never get that low. Every time I try to bottom fish this stock my offer becomes the concrete floor that is never penetrated.<GGG> Don't get me wrong, My gorcery cart is already full of WFRs<GG>.
You might want to take a shot at WFR. At, lets say, $8.50, a 25% return should present itself sometime this year, at the very minimum. Most of the fund Managers would give their eye teeth for an annual return of that magnitude. And as you know, we at RadarView aren't content with that and want more. So this number might be a trifle conservative for us<GG>.
BTW-the unofficial RadarView survey of my engineering contacts across the IC manufacturing plain tell me starts are creeping up and they are vblowing off excess wafer inventories at their fabs. If I were to make a SWAG, I would say that the end of March might be a turning point. Reticle deliveries have subsided a bit but that was more due to the ability of the designers to take their time with new devices, waiting for the new process technologies to come onboard, and simulate the designs more throughly. There are some real neat designs ready to hit the streets that should bolster wafer production.
And finally, INTC seems to be practicing "shuttle Let's Make a Deal". The want the RMBS design in manufacturing anywhere and everywhere they can. The interested reader can look at all the announcements, deals, commentaries, visits, etc., in the Pacific Rim and US by INTC to get companies into production with these designs. INTC is partnering for equipment and such, in order to meet the needs of its next generation of processors. these processors NEED these RDRAM memory devices due to the lightning speed of the processors and the "obsolete" capabilites of the old SDRAMs. And as we all know, CPUs and Memory Devices supposedely drives this industry. Well, it also drives up the volumes of wafers required to meet the customer demand.
Speaking of which, over the weekend I was reading about PC Free and it was given great exposure in the media. Get a free Compaq Presario if you agree to share personal information and will allow them to inundate you with advertsiements on your hard drive. You will be targeted by the advertisers that think they can get you to buy from them. Gone will be the days of the mail order catalog which is an expensive proposition to create, manufacture, and ship out. They are even alluding to free internet access. Why mwntion this? Well, there has to be a catch, but more importantly, it does validate an opinion I have had for awhile.
My ADSL modem came free with my ADSL service. I pay a small fee for my csble box each month. Everywhere I look, there is a tendency to give away the electronic hardware or software in order to get you to subscribe to the service. Heck, satellite dishes are getting close to being free. Any way, all these freebies contain ICs, ehich require wafers to produce them. We are seeing the tip of the iceberg relative to how many ICs are in our future.
True, the advertisers are effectively paying for these PCs that are free but CPQ doesn't care as long as they are paid for the bozes. I think, in the long run, advertsing expenses will drop significantly when this infrastructure is in place, when people are connected to the web on a daily basis, and these advertsiers can bombard your hard drive with targeted ads. Gee, this is beginning to look like SPAM, if you ask me<GG>. But it is SPAM mail you agreed to receive in return for your free PC. Then of course, you will see this data sold to other organizations and more spam mail to your hard drive. When all is said and done, you have a PC in every house and you won't have to call up the Home Shopping Network to order your goodies.
Bottom Line: More memory, more CPUs, more specialty circuits, more PCs, more PC Peripherals, better sound and graphics, etc., which means more ICs manufactured and therefore more "Wafer Substrate Slices".<GG>
Its not a matter of IF, it is just a matter of time WHEN.
Andrew Vance
RadarView Newsletter (Gee: I wonder if I should use this tonight<GG>)
stepman@hotmail.com
BTW-every Tom, Dick, Harry, and even any George out there, can get their own PC for free if they give up a little privacy. I can see it all now, mass deliveries to the retirement communities to tap a part of our society that is being neglected and probably has the disposable capital to be taken advantage of. You know, get up in the morning, check a few ads, make a few stock trades, and hit the golf courses by 10am. Meanwhile, your significant other can explore the wonders of the internet and shop till they drop. (In my case, my wife would probably be golfing and I would be exploring<GG>.)
If I didn't have as many PCs as we already have, I might take these guys up on their offer. The one requirement that would irk me would be not fooling around with the installed hard drive which they have rigged somehow. No problema for yours truly. Install a second drive with all your goodies on it and make it the master drive. Let the other drive fill up with all the junk and occasionally met your committment to look at the ads. But I'll bet they already thought of that and have some sort of fail safe to foil people such as I. As for me, I get enough unwanted email solicitations and SPAM, I do not think I would like any more. |
