Wall Street afunda com dados do emprego e tarifas. Amazon tomba mais de 8%

[Alfred E. Neuman]

Bernstein moves to 'overweight' chips, sector rallies (SMH, ADI, MCHP, NSM, INTC)

By Tomi Kilgore

NEW YORK (CBS.MW) - Sanford Bernstein said it was now recommending "overweighting" the semiconductor sector on the belief that a combination of better-than-expected fundamentals and a "contrarian's bet" against low sentiment will lift the sector over the next few months.

The Merrill Lynch Semiconductor Holdrs (SMH) was last up $1.07, or 3.5 percent, at $31.80, and reached a five-week high of $32 in intraday trading. Of the chip stocks Bernstein covers, the firm has "outperform" ratings on Analog Devices (ADI) , Microchip Technology (MCHP) , National Semiconductor (NSM) and Intel (INTC).

Bernstein's note was the second positive note on the sector in two days, as RBC Capital Markets raised its rating on chips to "neutral" from "defensive" on the belief that economic indicators were close to bottoming and that valuations have improved due to low expectations.

[Alfred E. Neuman]

Samsung expects global chip sales to slow

By Song Jung-a in Seoul

Last Update:6:30 AM ET Sept. 20, 2004


Samsung Electronics, the world's second largest chipmaker, expects global chip sales next year to grow at half of this year's pace, as increased supply saps prices.



The gloomy projection is in line with forecasts by Samsung's rivals such as Intel and Texas Instruments. The global chipmakers both lowered their sales forecasts this month, as growth in demand for chips used in personal computers is slowing.

"Semiconductor [sales] growth will slow down next year, and memory chip prices will fall sharply, because of increased supply," Hwang Chang-gyu, head of Samsung's semiconductor business said. "But we are prepared for steady growth thanks to specialised products."

He forecast chip sales to grow 20 per cent this year to $220bn and rise below 10 per cent to $240bn-$250bn next year.

Sales of memory chips will probably rise to $43bn this year and grow by 5 per cent next year to $45bn, Samsung said.

"The age for PC-driven growth has passed," Mr Hwang said. "Mobile and digital consumer applications are the new driving forces of the IT [information technology] era."

Computer shipments will increase 13 per cent this year to 191m units while sales of mobile phones will grow 20 per cent to 625m units, according to market researcher Isuppli.

Analysts said Samsung would be less affected than its rivals by slowing growth momentum in semiconductor business as it has substantially reduced its dependence on PC demand over recent years.

Samsung has become one of the world's best-performing technology groups by positioning itself in the fastest-growing and highest-value segments of the industry. As well as being the world's largest memory chip maker, Samsung is the largest flat panel producer and the third-largest mobile phone maker. Its net profits tripled in the second quarter to $2.72bn.

Mr Hwang declined to comment on the ongoing US investigation into D-ram makers on price-fixing charges, only saying that the company was fully cooperating with the two-year probe.

Germany's Infineon Technologies recently agreed to plead guilty to the charges and pay a $160m fine.

Analysts said Infineon's admission of the charges would have a negative impact on Korean chipmakers.

"It is definitely unfavourable to Samsung and Hynix Semiconductor. But even if Samsung is fined, that would not have a big impact on the company, because it has huge cash reserves," said Chin Young-hoon, an analyst at Daishin Securities. Samsung's cash reserves amount to Won9,000bn ($7.85bn).

[Alfred E. Neuman]

RBC: 'Doesn't pay to be negative on chips' (INTC, AMD, IFX)

By Emily Church

LONDON (CBS.MW) -- RBC Capital Markets overnight said it was shifting to a 'neutral stance' on the semiconductor stocks from a defensiev stance on the sector, citing macro-economic leading indicators as well as valuations in the sector. "While we're not recommending that ivestors "load-the-boat" with semi names, as there still may be further downside to semi stocks, we don't believe that it pays to be overly negative on the sector anymore," the broker said.

[Alfred E. Neuman]

Chip tool orders fall in August
Shipments drop for first time in 14 months

By Chris Kraeuter, CBS.MarketWatch.com
Last Update: 7:19 PM ET Sept. 16, 2004


SAN FRANCISCO (CBS.MW) -- Orders for chip-equipment placed with North American manufacturers declined in August and could decline further in coming months, an industry trade group said late Thursday.


Shipments declined for the first time since June 2003 and a key industry measurement, known as the book-to-bill ratio, contracted for the fourth month in a row to parity of 1-to-1, according to data collected by Semiconductor Equipment & Materials International.

In July, the ratio tightened to 1.04-to-1 and in August 2003, the ratio was 0.92-to-1. The ratio measures the value of orders received against the value of product shipped. A ratio of less than 1.0 indicates fewer orders coming in than being shipped, generally a negative trend.

"A number of recent company announcements suggest these levels may continue to soften in the coming months," said Lubab Sheet, research development director with SEMI, according to a statement.

Based on a three-month moving average, August data indicated orders of $1.52 billion, below the final order tally for July of $1.59 billion and above the $731.8 million seen in August 2003.

Equipment makers in North America shipped products valued at $1.51 billion for the month, below the $1.53 billion reported for July and up from $792.3 million shipped in August 2003.

Several semiconductor manufacturers, like Intel (INTC: news, chart, profile), Texas Instruments (TXN: news, chart, profile), and Analog Devices (ADI: news, chart, profile), have lowered their financial targets for the current quarter in past weeks.


Chris Kraeuter is a reporter for CBS.MarketWatch.com in San Francisco.

[Alfred E. Neuman]

The Tech Inventory Hair Ball

By Bill Mann (TMF Otter)
September 16, 2004

Yep, if you look off into the distance, you can see it. A little bit at a time, we're seeing the end of something that likely should never have started -- the notion that the technology industry was in the midst of some massive rebound, the beginning of the "next bull market."

We've noted that many of the biggest tech companies, such as Dell (Nasdaq: DELL), Intel (Nasdaq: INTC), and Cisco (Nasdaq: CSCO), have had spiraling inventories over the last few quarters. Naturally, those who are quite positive on the industry have an explanation: Inventories rise as companies anticipate an increase in sales. This, of course, is correct. A company caught short with insufficient supply in the face of rising demand risks sending its customers off to competitors to fill their orders.

But the risk in rising inventories is that sales do not continue to improve. This has already started happening; in the second half of the year companies such as Intel have stated that customers were delaying orders, and as a result these companies were going to burn off inventory to respond to the "soft spot" in sales. The implication is that the softness in technology spending is short-term in nature, a problem that would work its way through in a quarter or so.

Recent supplier warnings tend to confirm what I had thought all along: It's not the soft patch that is short-lived, it was the spike that was temporary in nature. On Tuesday, integrated circuit manufacturer Xilinx (Nasdaq: XLNX) warned that its guidance was too high and then dropped a bombshell -- in a quarter it had previously set aside to burn off inventory, its days inventory outstanding actually rose substantially to 155 days. For those of you who are playing the home game, that's nearly a half-year's worth of products sitting on the company's shelves. This at a time when the company says sales are down dramatically from its Asian clients because of "excess inventories held by U.S.-based customers."

But who are Xilinx's customers? Well, to start with, another company that warned recently, contract manufacturer Celestica (NYSE: CLS), which also said that its inventories are growing. Celestica's big customers? Cisco and IBM (NYSE: IBM) are among the biggest. Who else is warning? Cypress Semiconductor, Altera, Texas Instruments (NYSE: TXN), and LSI Logic have each made a trip to the confessional as of late. All of these companies have to some degree been ramping up their production in advance of continued improvements in technology sales, either from replacement cycles or from new sales. That they're each sitting on tons of product hoping that the hair ball will clear should be more than a little disconcerting.


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Bill Mann owns none of the companies mentioned in this story. He is waiting for prices to drop before he replaces his current PC and is sure that they will do just that. Please check his profile for a list of current holdings.


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