Semi Stock Week: Chip making retreat as a disappointing forecast from Cisco weighs on the sector.

Semi Stock Week: Chip making retreat as a disappointing forecast from Cisco weighs on the sector.

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Description: Semi stocks retreated sharply, ending an eight-week run as a disappointing forecast from Cisco and string of macro concerns weighted on the sector. Cisco’s lackluster forecast stoked fears that the rebound in enterprise may be weaker-than-expected given the uncertainty at the macro level. This prompted investors to take profit and move to safer pastures.

The hot stock of the week was SOITEC .

 
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Maxims of Tech: Rules of Engagement for a Fast Changing Environment
Contents:
The Chip Insider� November 13, 2010 � Semi Stock Week: Chip making retreat as a disappointing forecast from Cisco weighs on the sector. The hot stock of the week was SOITEC. WildPhotons: Fame...
Semiconductor stocks retreated sharply, ending an eight-week run as a disappointing forecast from Cisco and string of macro concerns weighted on the sector. Europe's sovereign-debt issues came back into play and there were worries that China might tap the brakes to fight inflation. Cisco's miss was a bit of a head-scratcher for investors because it was unexpected and unusually large for the tech bellwether. The company cited a "challenging economic environment" particularly in U.S. and Europe. Cisco's lackluster forecast stoked fears that the rebound in enterprise may be weaker-than-expected given the uncertainty at the macro level. All this prompted investors to take profit and move to safer pastures. The hot stock of the week was SOITECSOI.PA, followed by Nikon7731, OerlikonOBH.SG, IntelINTC, Toshiba6502, and Samsung005930.KS.

SOITEC was the hot stock of the week, jumping a whopping 18%. Its stock rocketed after EETimes reported last week that Intel may begin using the siliconon-insulator technology, citing Piper Jaffray's analyst Gus Richard. The switch to SOI would be a huge boon for SOITEC, if it happens. But that remains to be seen. Second place went to Nikon. The company cut its full-year operating profit and revenue forecasts, citing a stronger yen, though it was less than investors feared. Third place went to Oerlikon and fourth to Intel. The latter plans to boost its quarterly dividend by 15%. Investors welcomed Intel's move, viewing it as a sign that the company is on track for healthy growth ahead. Intel's dividend will increase to 18 cents, beginning in the 1Q11. Toshiba took fifth place after announcing strong quarterly results. Operating profit nearly doubled to 71B yen in FYQ2, from 36.46B yen a year earlier. Revenue

rose 3% to 1.630T yen from 1.583T yen. Toshiba's chip business recorded an operating profit of 35B yen in the quarter, up nearly sevenfold from 5.2B yen a year earlier as NAND sales soared. So here's all the data:

The stock indices are indexed to 100 at the beginning of the year. So 108 means that the index is up 8% for the year. Chips-to Coffee is the ratio of Intel to Starbucks Stock Price-to-Earnings (P/E) ratios. The P/E ratios are based on Friday's close divided by earnings per share for the most recent four quarters. Forward P/E ratios are calculated using the estimates for the next year published at Yahoo Finance. It is intended as a quick measure of how investors view the health of the chip industry relative to the trendy side of the old economy, with the view that by taking a ratio of the valuations of the leaders is an approximation of this. Both companies are the leaders in their areas as well as being leading edge in product delivery.

100

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Week
Stock Prices: HT2 Stock Prices: Chips S&P 500 Stock Prices: Equipment

(Stock Prices Indexed to 100 in last week of 2009)

Copyright � 2010 by VLSI Research Inc. All rights reserved.

Chip Making Stock Performance

Jan-09 Jan-09 Feb-09 Feb-09 Mar-09 Mar-09 Apr-09 Apr-09 May-09 May-09 Jun-09 Jun-09 Jul-09 Jul-09 Aug-09 Aug-09 Sep-09 Sep-09 Oct-09 Oct-09 Nov-09 Nov-09 Dec-09 Dec-09 Dec-09 Jan-10 Jan-10 Feb-10 Mar-10 Mar-10 Mar-10 Apr-10 Apr-10 May-10 May-10 Jun-10 Jun-10 Jul-10 Jul-10 Aug-10 Aug-10 Sep-10 Sep-10 Oct-10 Oct-10 Nov-10

Links to Conference Call Transcripts
Agilent F4Q2010 Results - Earnings Call Transcript NVIDIA F3Q2011 Results - Earnings Call Transcript Microsemi F4Q2010 Results - Earnings Call Transcript Kulicke & Soffa F4Q10 (Qtr End 10/02/10) Earnings Call Transcript Cisco Systems F1Q2011 Results - Earnings Call Transcript

WildPhotons: what nature can teach you about life

Fame always brings loneliness. Success is as ice cold and lonely as the North Pole.
Vicki Baum Great Basin National Park NV Why it Works: It's the vibrant colors of the broken birch limb against the muted colors of winter. Reference number: NVgb0805_115

follow Dan Hutcheson's photos on twitter @wildphotons see them all at flickr.com/photos/wildphotons/

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Although data was obtained from sources considered reliable, it cannot be guaranteed. No independent steps have been taken to confirm its accuracy, truthfulness, or completeness. This report may contain stock information that is obtained from the opinions of analysts. Quoted past results are not necessarily indicative of future performance. None of the information should be seen as a recommendation to buy or sell. We are not stock analysts. You should contact a registered investment advisor as to the nature, potential, value or suitability of any particular investment action. To the extent any of the information contained herein may be deemed to be investment advice, such information is just an opinion and is not tailored to the investment needs of any specific person. VLSI Research is paid in connection with the analysis and investigation herein, which may be included in this publication. Certain statements in this report, and other written or oral statements made by VLSI Research are "forward-looking statements" within the meaning of the U.S. federal securities laws. All statements, other than statements of historical fact, are forward-looking statements within the meaning of these laws. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "intends", "plans", "anticipates", "believes", "thinks", "estimates", "seeks", "predicts", "potential", and similar expressions. Although VLSI believes that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include those listed under "Risk Factors" and elsewhere in our clients' Annual Reports on Form 20-F filed with the U.S. Securities and Exchange Commission. Those factors, among others, could cause actual results and performance to differ materially from the results and performance projected in, or implied by, the forward-looking statements. You should carefully understand that forward-looking statements are not guarantees of performance or results. New risks and uncertainties arise from time to time, and VLSI Research can not predict those events or how they may affect you, the reader. Except for any ongoing obligations to publish or disclose material information or as required by the federal securities laws, VLSI Research Inc does not have any intention or obligation to update forward-looking statements after the date of this report. Copyright � 2010 VLSI Research Inc. All rights reserved. No part of this publication may be used in any legal proceedings. The Chip Insider� is a registered trademark of VLSI Research Inc. All other trademarks, service marks, and logos are the property of their respective owners. Privacy Policy

Keywords: stocks, semiconductor, chips, VLSI, equipment, chip-to-coffee ratio, BESI (BESI.PK) followed by Infineon (IFX), Kulicke & Soffa (KLIC), KLA-Tencor (KLAC), ASE (ASX), Nikon (7731), Toshiba (6502) Summary: Chipmaking stocks had another great week beating the S&P500 again. Leading the pack was BESI (BESI.PK) followed by Infineon (IFX), Kulicke & Soffa (KLIC), KLA-Tencor (KLAC), ASE (ASX), Nikon (7731), Toshiba (6502).

Semiconductor stocks ended September on a strong note. Both the chip stocks and equipment stocks outperformed the S&P500 by a wide margin this week. Equipment stocks and chip stocks tied, with a gain of 1.7%. Despite all the negative media attention on semiconductors, VLSI's chip indexes have outperformed S&P500 for three straight weeks. This strongly reflects the strong growth in weekly semiconductor sales last week. Also, the Chips-to-Coffee ratio held constant, so the coffee just wasn't strong enough this week.

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