15 replies to this topic

[Cirrus]

The problem I have with the chip industry is its 'commoditization'. I agree there's intellectual property there but a large part of the chip sector is buying a machine and stamping out parts. That may be overly simplistic. I think the industry's huge secular growth spurt is over. Yes, it will grow, but in a more cyclical fashion. Right now the bottleneck for the world economy is energy and industrial metals. Margins have been expanding in those sectors for a while. It's not your grandad's cyclical move, either. There will be volatility but the trend is up.

[SemiBizz]

And I think we're on the edge of a replacement cycle in PC's with the new MSFT OS... The chips have flat out told you something by the fact that the SOX was the only index that didn't test the 2007 lows during the Feb/Mar Crash...

[paulstan]

I don't think there's going to be a widespread push to upgrade PCs. Microsoft Vista is a debacle (no strong corporate adoption), and there's no software driving corporates to upgrade their hardware. Semi -- do you see any industry indications that demand is going to truly go up for upgrades?

[denleo]

I like semiconductors. I see signs of accumulation. Although I don't own them now, I think they look good. Here is the problem: Semiconductors never lead!!! Every time they assume a leadership role on the upside, the market gets in trouble. Why? Who do you think trades them? Momentum guys! And momentum guys have a tendency to jump at the wrong time So if you are bearish on the market, you want semis to hold better than others. Banks and brokers are the oposite, beacuse they are dominated by institutions. Denleo

[arbman]

Good thinking denleo, indeed the tech has become the suckers' play, especially near the overbought market tops... Dow component Alcoa (AA) is up over 2% AH, I guess the indices are going up unless they gap and crap right away tomorrow...

[SemiBizz]

I don't think there's going to be a widespread push to upgrade PCs. Microsoft Vista is a debacle (no strong corporate adoption), and there's no software driving corporates to upgrade their hardware.

Semi -- do you see any industry indications that demand is going to truly go up for upgrades?

Yes, folks in Silicon Valley are expecting a strong 2nd half... That's not a reason to buy the stocks though. The bottom line is there is not a lot of interest in selling these stocks. They held up during the "crash". So looks to me like risk/reward is shaping up. Fundamentally the one stock that's holding the SOX down here is MRVL. MRVL represents the future for the chip industry. And MRVL has a scandal that needs to get cleared up. Otherwise the company is doing well and is set to release some nifty new products.