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To: Mohan Marette who wrote (101710)	2/17/1999 10:57:00 AM
From: Dalin	Read Replies (1) \| Respond to of 176387

Hi Mohan! OT.........OT Check this out! My VTSS LOOKING GOOD! Posted 2/15/99 Sectors & Trends Bargains still exist in chip sector Analysts expect "astounding" growth in the communications-chip field and smaller players such as Vitesse, Level One and PMC-Sierra are poised to profit. By Michael Parrish Microsoft Investor Think outside the PC box. Think of cellular phones, fax lines, data-transfer systems, business communications systems -- and all the chips needed to make those connections. Think about the fact that 80% of all phone calls today pass along data, not cheery hellos. Think about how many phone and data lines serve you personally. Communications chips were once a sideline of the big semiconductor manufacturers. But as demand for bandwidth grows relentlessly, smaller companies that have otherwise been making chips for the military and for such inconspicuous uses as automated test equipment have seen their fastest revenue jumps in communications -- and most are repositioning themselves as pure plays. Communications chips has become the fastest-growing of all semiconductor sectors. What's the bottom line for investors in Vitesse Semiconductor (VTSS), Level One Communications (LEVL), Applied Micro Circuits (AMCC), PMC-Sierra (PMCS) and others? Depending on your choice of industry prophet, the semiconductor business as a whole should grow a solid 9% to 12% this year. Predictions for the communications-chip chunk of this, however, run to 30%, or much more. "It's astounding the growth that these guys have," says Clark R. Westmont, communications component analyst at NationsBanc Montgomery Securities. "The numbers currently in Street expectations for 1999 are still conservative given the growth rates of the last two years." David Wong, communications-chip industry analyst at Needham & Co., agrees. "The end markets in telecom and datacom are extremely strong," says Wong, who dismisses last fall's fears of a weakening telecom market as a "purely psychological quirk." And Elias Moosa, technology analyst at BancBoston Robertson Stephens, predicts that similar growth could last for the next five to 10 years. These aren't necessarily cheap stocks. Fans pushed share prices up strongly last year, ahead of the broader semiconductor revival. But in a high-tech world that has not always been kind to investors, the plain probability of more robust growth for these lesser-known chip makers is enticing. Despite the technology downdraft that blew in early February, "most of these stocks have been pretty strong, and they're currently holding their own," says Doug Fairclough, investment strategist at ClearStation, the online investment site. And, even now, there are bargains to be had. Vitesse has no debt Vitesse is a big favorite and it's not hard to see why. The $3.7 billion supplier to the likes of Cisco Systems (CSCO), IBM (IBM) and Lucent Technologies (LU) specializes in high-speed gallium arsenide chips, originally in high demand for supercomputers and now in demand for high-frequency wireless and fiber-optic communications systems. Gallium arsenide is trickier to deal with than silicon, but electrons pass through it up to five times faster. The company's business picture is equally attractive. Unlike many puffed-up Internet stocks, Vitesse has no debt. Vitesse is also renowned for hitting its numbers quarter after quarter, and the company celebrated the new year by announcing a 73% bump in revenues over the same quarter the year before. Success has not gone unnoticed, however, and a 69 P/E multiple will give some pause. But Wong and others maintain a "strong buy" rating. "Vitesse is positioned in some of the very fastest-growing markets in telecom and datacom," says Wong. "I think they're one of the best companies in the group."