Tuesday, March 15, 2005

SEMI: Strategic Business Conference (SBC)

SEMI: Strategic Business Conference (SBC) For the second year I am serving as Committee Chairman for SEMI's Strategic Business Conference. I really have a great group of people to work with - members and employees of SEMI that put in a great deal of effort putting this event together. This year I think the team has assembled a top-notch program. It's so good that I think it is appropriate to let INFRASTRUCTURE readers know about it so if they have an interest they can sign up before all the seats sell out. SEMI has set up a page on their site where you can view the agenda and register. The companies and speakers that will be presenting represent a who's who of the semiconductor business. SBC 2005 Keynote Speakers: * Joe Zelayeta, Executive Vice President, ASIC Technology and Methodology, LSI Logic * Jon Kang, Senior Vice President, Samsung Electronics * Wally Rhines, Chairman and CEO, Mentor Graphics * Robert Bruck, VP Technology and Manufacturing Group Director, Fab Capital Equipment Development Intel Corporation In addition to these speakers executives from Texas Instruments, SMIC, IBM, Renesas, Micron, STMicroelectronics, Nanotera, Infineon and National Semicondutor will take the stage. There will be two panel sessions at the Conference. The first, manned by Ken Rygler, will address the question of Designing for Profitability; Designing for Dollars? The second panel discussion is particularly germane to recent news: Equipment Life Cycle Management: Optimizing the Return on Assets for Legacy Fabs. That panel will be moderated by Dana Ditmore of Oak Valley Consulting. The program and the setting makes SBC one of the best networking events of the year. The conference takes place May 9-11, 2005 at the Resort at the Mountain, Welches Oregon. Check it out. If you have any questions, drop me a note. I hope to see you there. Carl

Two Takes On The Global Scene

Over at Tom Brown's website, Bankstocks.com, Eric Miller, once Chief Investment Strategist at Donaldson, Lufkin, Jenrette, has written a really good piece on the long term implications of China's growth. Definitely worth a read: http://www.bankstocks.com/article.asp?type=1&id=9880606 We all know that China's growth has huge implications for the chip and chip equipment companies - whether it be the delivery of the most advanced technology or the servicing (see yesterday's news from Novellus) of older generations. What I find most interesting is that the emergence of China as a chip making country has not pulled the sector out of the performance doldrums - just look at share prices!
Then there is this short but sweet macroeconomic summary from Brookville Capital's Abraham Gulkowitz: Everlasting Bliss Hiring gains in the U.S. are still not spectacular when judged against earlier cyclical rebounds, but as underscored by the impressive gain in nonfarm business payrolls in February, there is enough evidence that the outlook in the U.S. remains far and away the best of the major economies. The U.S. economy's obvious resilience, combined with still relatively low inflation and the corporate sector's strong profitability, ample liquidity and access to credit - all characterize a wonderful business and financial backdrop. While the strong momentum is real, decelerating earnings, rising inflation, and gradually rising interest rates across the maturity spectrum may yet test this optimism. Low interest rates in all major economies, supportive forexreserves in Asia, declining credit spreads and docile equity market volatilities all point to an abundance of liquidity in the world economy and a "what me worry" risk attitude. However, a dangerous self-reinforcing circle has developed. Rapid reserve growth feeds back into the U.S. and supports low rates and a desperate search for yield. A high and rising appetite for risk in the global financial system, in turn, is nourishing strong growth in emerging economies, including China. The result is an unusual combination of amazingly low credit spreads and very high commodity prices. As commodity inflation and an ample risk appetite fuel speculative forces, the global financial system moves further and further into a domain where assets may become precariously overvalued. Imbedded in these developments are two obvious trends that we have highlighted previously --the rising role of housing's boom to feed consumption spending and the rapid expansion of manufacturing capacity in Asia. How's that for a summary take? Carl

Watching Paint Dry.......

It's like watching paint dry. Look at the chart below. It portrays the action in Applied Materials (AMAT) over the last two quarters.
Nothing doing.... Going nowhere..... Boring.... Oh sure, there are a few investors that can trade these little ranges, pocketing a nickel or two here and there, but generally Wall Street, excluding the 30+ analysts that follow the company, is showing little interest. Something is missing..... Fundamentals? Perhaps so.... It probably will not be much longer before companies in the chip and chip equipment sector break out of these ranges. There are a few analysts out there that believe the break will be to the downside - pushing share prices toward the lows posted several years ago. A move like that would be shock for many long term holders. Personally, I don't find it out of the realm of possibility. In fact if it did happen I am hopeful that it happens sooner rather than later. Chart Watch and Model Comments are under construction. We're going to make some trades this week. Those comments, along with other items of interest, will be posted and e-mailed ASAP. Your thoughts are welcome and appreciated. Carl