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Monday, January 5, 2009

Some good points in the Credit Suisse semicap downgrade

Semiconductor equipment stocks have rallied 35% off their lows on anticipation of a trough in orders. Much of the order recovery rally may have occurred already.

Maintenance capex will keep the industry in oversupply. Memory producers need to eliminate capacity, not maintain it, for the market to stabilize.

Foundries can effectively double output from their present 40-45% utilization levels before running into capacity constraints.

Me, not him:

From struggling homeowners to the growing ranks of the unemployed, from the banks to the broke chipmakers, there's going to be a whole lot of focus on getting the most out of existing goods and services and less urgency on increasing capital expenditure.

My belief is in 2009 the trick is going to be squeezing more juice out of the lemon.

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