Abstract
Disappointing earnings guidance from Texas Instruments and a downgrade on Micron Technology sent the SOX index reeling (The Philadelphia Semiconductor Index — XPH: SOXX) off more than 3.5%, albeit still up an incredible 55% year-to-date. The semis’ strong run this year has been predicated upon a second-half earnings recovery, which would then turn into a full-bore cyclical upturn in 2004. But there are two problems at this juncture: 1) the sustainability of the current economic recovery is by no means a foregone conclusion (especially given recent signs of worsening unemployment); and 2) semis’ valuations at this point are in nose-bleed territory, even when viewed through the lens of next year’s earnings estimates. This is a short news story only. Visit www.three-fives.com for the latest advanced semiconductor industry news.
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