Semiconductor Capital Equipment Stocks Discussion

Semiconductor Rally Fails To Lift Technology Stocks

Top 381. Aug 16, 2000 12:06 AM

» JenL_2 - Semi Rally Fails To Lift Tech Stocks

This from 8/16 WSJ:

By DANIELLE SESSA

Semiconductors extended their rally Tuesday, but the rest of the technology sector didn't come along for the ride.

The Nasdaq Composite Index inched up 1.97 to close at 3851.66, while Morgan Stanley's high-tech 35 index rose 10.85 to 1038.12. The Dow Jones Internet Index, meanwhile, added 0.60 to 276.43.

The Nasdaq lumbered through Tuesday, as investors remained content to wait on the sidelines until the Federal Reserve decision on interest rates next week. Volume on the Nasdaq Stock Market came in at 1.35 billion shares, an improvement from Monday's skimpy 1.16 billion shares, but still below normal levels.

Chip stocks notched strong gains for the second day in a row as investors seemed to continue to believe that the sector will rebound in the fourth quarter from a slight summer downshift. Comments from Morgan Stanley Dean Witter about further earnings gains in semiconductor stocks added to the positive sentiment surrounding the group.

National Semiconductor was up 2 1/4 to 40 and Texas Instruments jumped 2 to 65 3/4 on the New York Stock Exchange, while Rambus rose 3 13/16 to 80 3/4 on the Nasdaq Stock Market. The Philadelphia Stock Exchange Semiconductor Index rose 3.2% to 1061 after gaining almost 8% Monday.

Micron Technology built on the momentum generated Monday after a Salomon Smith Barney analyst who had expressed doubts just last month about the stock and the sector upped his earnings estimates for Micron. Micron rose 6 1/16 to 86 9/16 on the Big Board.....

Subscribe to WSJ Online @ http://www.wsj.com

....Jen

-- posted by JenL_2

Market Movers: Look for techs to lead charge, expert says

Top 382. Aug 16, 2000 8:00 AM

» JenL_2 - Look for techs to lead charge

This from 8/16 SeattleTimes.com:

by Greg Heberlein

Stocks will come back, and when they do, look for the technology sector to lead them.

That's the word from Randall William-Gurian, who runs Northwest Capital Management in Seattle and the Undervalued Stock Ideas newsletter through his Web site..

http://www.usistocks.com

"Investors have to realize there's value in technology," Williams-Gurian said. Although it's possible another segment will take over market leadership, Williams-Gurian is convinced it will be the techs.

"Within certain sectors, there's a lot of fear, and that to us is a lot of opportunity," Williams-Gurian said. "Fear creates opportunity."

Semiconductors and related chip makers melted in value because a Wall Street analyst cooled on the group. That proved a perfect time to buy, Williams-Gurian said, because computer chips have turned into an excellent investment.

A catalyst for the tech renaissance will be a drop in interest rates, which Williams-Gurian said he expects by year-end 2000 or early in 2001. He also forecast that at Tuesday's meeting of interest-rate gurus, their "bias" will turn from tightening to neutral, a bullish move by itself.

The market hasn't fully anticipated the good events, Williams-Gurian said, because of the damage done in March in April.

But he's busy buying techs now. Among his recent favorites are TriQuint Semiconductor, Micron Technology, Lam Research, Applied Materials, Nortel Networks and Corning......

......Jen

-- posted by JenL_2

http://eet.com/story/chipwire/OEG1999102...

Top 383. Aug 16, 2000 11:43 AM

» Kirk - Chip industry warned to brace for imminent downturn

From: Alastair McIntosh

A different view of the chip industry:
Chip industry warned to brace for imminent downturn

By EBN staff
Electronic Buyers' News
(08/15/00, 05:10:17 PM EST)

While most pundits see nothing but robust growth ahead for the semcionductor industry, one analyst is projecting a downturn by next year.

Citing the classic signs of a cycle shift, Advanced Forecasting Inc. today warned of an industry-wide recession in early 2001. One early indicator of stagnation ahead, according to AFI: worldwide equipment sales leveled off in May and June at approximately April's $4.75 billion-per-month level.

However, Advanced Forecasting Inc. has been negative for some time:

Forecaster warns of possible industry downturn

By the SBN news staff
Semiconductor Business News
(10/21/99, 2:15 p.m. EST)

-- posted by Kirk

Top 384. Aug 17, 2000 7:04 AM

» Kirk - Motorola Cancels Orders to Wafer Foundry Manufacturers

Motorola Cancels Orders to Wafer Foundry Manufacturers

August 17, 2000 (TAIPEI) -- Motorola Inc. significantly decreased its orders to Taiwan Semiconductor Manufacturing Co., Ltd. and Singapore-based Chartered Semiconductor Manufacturing Ltd. due to softer demand for mobile phones.

Several market watchers predicted that the mobile phone market would remain weak for more than one year, effecting a change in the production of worldwide semiconductor manufacturers.

Motorola announced in early August that its mobile phone output would be lower than its previous expectation of 100 million units, at 80 million to 85 million units in 2000. Nokia's prediction of mobile phone shipments for the third quarter also disappointed observers.

While several institutions saw clouds on the horizon, semiconductor manufacturers also became pessimistic about the mobile phone market. They predicted that global shipments of mobile phones would decline by around 50 million units this year, from the previous projection of 400 million to 450 million units.

To respond to the sharply shrinking mobile phone demand, Motorola was forced to cancel its pre-ordered wafer foundry production at TSMC and CSM, and significantly decrease its mobile phone contract manufacturing orders for the same time period.

Motorola's retreat was confirmed, but watered down, by TSMC's vice general manager, Long Na-te. Long is unwilling to accept the widely pessimistic view in the market. TSMC's orders, which have exceeded its production capacity, are expected to take long to digest. Moreover, its orders of ICs for mobile phones are light in the order book.

However, the market watchers will not hold the same optimism about CSM because of its relatively close relationship with Motorola. CSM said it would work at full capacity to meet the orders of communication-related products, and strengthen its cooperation with Motorola.

According to market analysts, the depression in the mobile phone market will have limited impact on Taiwan's semiconductor manufacturers for the time being, given that the electronics industry's traditional peak season will make up for the order reductions. However, the sufferings of leading global communication components providers, including Texas Instruments (TI), ADI, Intel and Samsung, may lead to a big change in the local semiconductor manufacturing industry in the future.

(Commercial Times, Taiwan)

-- posted by Kirk

Top 385. Aug 18, 2000 12:54 PM

» Kirk - ML Upgrades Semi's

Joe Osha of Merrill "Grinch" was JUST on CNBC

He was saying Semiconductor sector should end the year above their recent highs...

Ron asks "Why the big change from such a short time ago?"

Said they sent their analysts out into the World, they just came back and found....

Are you sitting down?

They found that there was a shortage in chips!
ROTFLMAO!!!

We've been writing about this for a year! The WHOLE reason they downgraded was they THOUGHT the shortage was going away.

Sometimes I think they could send their analysts out into the world and have a hard time finding the part of their anatomy that keeps the toilet seat from flying away.

Thanks for the easy money guys!

-- posted by Kirk

Top 386. Aug 18, 2000 8:40 PM

» Kirk - Chip Stocks Defended II

<Investors can thank Morgan Stanley Dean Witter's chip analyst, Mark Edelstone, for much of that move as he lighted a fire under the chip and chip equipment stocks with his research note on Tuesday in which he suggested the semiconductor cycle has another 18-24 months left in it due to strong demand. His timing couldn't have been better since the chip and chip equipment stocks had been beaten up badly in prior sessions as concerns mounted over the sustainability of the chip cycle.

Well, the chip and chip equipment stocks are getting a little more love today. This time, it is Joe Osha, semiconductor analyst at Merrill Lynch, who is adding fuel to the fire started by Edelstone. Claiming that the mid-cycle correction has run its course and that the industry will be underpinned by improved pricing and capacity constraints going forward, Osha is aggressively pushing the semiconductor stocks and is placing a particular focus on names in the communications-oriented and foundry businesses. Specifically, he would now be purchasing Texas Instruments (TXN 70 +2 1/2), Cypress Semiconductor (CY 46 +1), Atmel (ATML 36 9/16 +3 1/4), and Vitesse Semiconductor (VTSS 81 11/16 +1 11/16) as well as the following component stocks: Kemet (KMT 25 7/16 -5/16), AVX Corp. (AVX 28 3/8 +3/8), and Vishay Intertechnology (VSH 34 1/2 +15/16). He is also telling investors to focus on names such as ST Microelectronics (STM 62 5/16 +7/16), National Semiconductor (NSM 44 3/16 +2 1/8), Analog Devices (ADI 96 9/16 +4 1/16), Taiwain Semiconductor (TSM 36 3/16 +11/16), and Chartered Semiconductor (CHRT 86 3/4 +2 7/8).

Aside from these specific calls, Osha has given the semiconductor group an added boost by raising his global revenue growth forecast for 2000 from 32% to 40%, and for 2001, from 21% to 26%. Interestingly, Merrill Lynch's chip equipment analyst, Brett Hoedess, is in agreement with Osha's comments on the semiconductor cycle and he is recommending investors now purchase Entegris (ENTG 10 9/16 +1 1/8) and MKS Instruments (MKSI 26 15/16 +3 15/16).

Whether it was by design, or not, there was no mention of the view of Merrill Lynch's quantitative research group, which caused quite a stir last month when it lowered its rating on the chip sector from MARKET OVERWEIGHT to MARKET WEIGHT.

Obviously, everyone's method of investing is different, but for now, Merrill Lynch's and Morgan Stanley Dean Witter's fundamental views are clearly taking precedence.-- Patrick J. O'Hare, Briefing.com>>

-- posted by Kirk

Top 387. Aug 19, 2000 7:26 AM

» Slick - Thanks Kirk

It was nice to take advantage of this hiccup for the short term. AMAT LRCX SFAM all were added to my portfolio, lowering my costs ( Except LRCX of-course--under 10 there (:>)]. These guys sound vaguely reminiscent when they say " mid-cycle correction". Still, got to give them credit for finally getting it right, even though SOME ( of their clients) certainly lost on their original call. I guess it also show just how much nervousness is actually out there. Is this really complacency? Thanks to, from your subscribers, for having the guts to spit into the wind , so to speak. I feel comfortable that my money is in savvy hands.

Slick

-- posted by Slick

Top 388. Aug 19, 2000 8:18 AM

» Kirk - Thanks Slick

Thanks Slick

Still has tons of risk in the sector, but when you can get the shares on a fire sale, the upside is often greater than the downside and that is good when you buy into a sector growing at 30% or so.

About the analysts and such... I am sure when Ford put the Model-T on the Assembly line, more than a few said "Great, but it will NEVER replace the usefullnes of a horse". Well, perhaps that was true, but can you tell me any horse carriage companies that are still around and what are their market caps? Ford is still going strong. I am SURE that Ford had good and bad times along the way too.

This chart
http://finance.yahoo.com/q?s=AMAT&d=my
tells an interesting story and this one is even more interesting
http://finance.yahoo.com/q?s=amat&d=my&c...

My goal on Suite101.com is to give the information HERE that people can use to decide for themselves when to buy or sell the sector and then my newsletter gives more help for my OPINIONS of proper prices to pay to get in or out.

cheers!

-- posted by Kirk

http://finance.yahoo.com/q?s=amat&d=5y

Top 389. Aug 19, 2000 8:29 AM

» Kirk - First Bought AMAT

I first bought AMAT on 7/2/96 at a split adjusted price of $6.12 a share. I had been designing semiconductors since 1978 and saw that they were going to be going into just about everything as we were getting better design tools to turn designs faster.

This chart shows a big downturn every two years and we seem to have just had one. Also notice that the bottom of the downturns, for the last two, are at the peaks of the old tops.

http://finance.yahoo.com/q?s=AMAT&d=5y&x...

Past history is no gaurantee, but.... IF you can buy at major pullbacks, odds are you will make a ton. I think that $115 to $79 in amat
http://finance.yahoo.com/q?s=AMAT&d=1y
and $56 to $22 for LRCX counts as a good pull-back!

oh yes, we've done well on SFAM also buying cheap and taking profits when high ($27 if I remember right?) and then buying back more when cheap again.
http://finance.yahoo.com/q?s=sfam&d=1y

Congratulations on your great buys and thanks for sharing!

So, how is your horse?

-- posted by Kirk