phwting

TiVo Has Threats Ahead

With the threat of IPTV comes opportunity, i.e. TIVO is already renaming the DVR to Digital Video Retriever. A new generation of set top boxes and smart TV's are fighting it out for control of your TV and TIVO is in the middle of it via YouTube access, Entertainment Weekly and Chicago Sun Times movie reviews. Think of google for IPTV video. If people have trouble with 100 cable channels and still have nothing to watch, how about 1000's of channels on the web. TIVO's thumb up/down peer ranking and search by Title, actor, etc is second to none. With the link to Amazon, you can also purchase what you see in a show. And while waiting for IPTV to take off, TIVO is licensed to Comcast, Cox, and DirectTV.

Semiconductor Shipments: Leading Indicator of Tech Strength?

Have you considered the Feb 09 Digital TV transition. Have been shopping for converter boxes and they are flying off the shelfs at retailers. Other people will opt for new TV's that can directly receive the free off the air digital signals. Combined with the two $40 coupons, the digital TV transition is one heck of a stimulus to the electronics sector.

Intel Could Come in Low Due to Weak Processor Orders

How about this analyst on 2/26 saying things are fine ? Asustek also say rising shipments in Europe will keep shipments level thru March. Also, could Intel be keeping inventory due to a product transition to 45nm?

"Jefferies & Co. analyst John Lau said in a note to investors that his analysis suggests chip inventory levels are at normal levels for the season.

Lau said his report "addresses many of the concerns about excess inventory" and that there are no major problems.

However, Lau warned that some analog chip makers with high exposure to the Chinese cell phone market could experience some inventory buildup. He did not expect this to be a long-term problem.

Lau found average inventory levels to be healthy for a group of chip companies that included Advanced Micro Devices Inc., Intel Corp. and others."
biz.yahoo.com/ap/08022...

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www.digitimes.com/410....
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Asustek delivers desktop PC and motherboard forecasts for 2008


Mobo, chipset | Feb 20, 01:05

Due to the increased demand for motherboards in Europe during January this year, Asustek Computer's motherboard shipments saw a boost compared to December, according to Joe Hsieh, vice president of Asustek's motherboard business unit product marketing department.

Currently, Europe accounts for 40% of Asustek's total motherboard shipments, while Asia Pacific stands at 30%, as does North America, Hsieh noted.

With Europe's motherboard demand still rising, Asustek's shipments in February and March are expected to hold at the same level as January. Shipments in the second quarter will be better than the first since Intel will launch new products in March and April, while adjusting the price of existing products, Hsieh predicted. Branded motherboard shipments are expected to reach 24 million units in 2008, a growth of 13% compared to 21.3 million units in 2007.

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Intel to cut 65nm processor prices for 45nm

Mobo, chipset | Feb 20, 14:30

Intel is set to lower its 65nm CPU prices in order to speed up the transition between the 65nm and 45nm CPUs, according to sources at motherboard make... Read more

LCD Market: Supply/Demand Balance Remains Out of Whack

The first line of the article that is NOT quoted reads

"Rapid price reductions are boosting sales of large-sized Liquid Crystal Display Televisions (LCD-TVs), prompting iSuppli Corp. to increase its forecast for LCD-TV panel shipments in 2007"
www.isuppli.com/news/d...


A more balanced story about supply and demand is at

www.displaybank.com/en...
"Looking at future demand on a square meter basis, although all TFT-LCD investments in progress will be put into practice, the sharp increase in demand will highlight an additional investment of $60 billion from 2008 through 2011.

The prediction is on the assumption that Samsung's seventh and eighth-generation (7G and 8G) expansion plans and LG.Philips LCD's 7.5G project will be all put into practice. Notwithstanding the involvement of the supposition that Sharp Corp. will be successful in boosting its 8G capacity to 70,000 units monthly by the end of 2008, the industry will not keep pace with the upward trend in demand for large-format LCD panels without an additional investment in 2008 and beyond."

From Corning's Conference Call: LCD Market Update

Corning is fairly valued according to Morning Star compared with S&P 500.
It's a steal with a peg of 1.1 vs 1.7 for the S&P500 in forward valuations.
quicktake.morningstar....;Symbol=GLW&st...
Since Corning is recovering from near death, 2005 ttm data is useless.
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1- Telecom is providing the cash for Corning's business. And it will gusher more cash once they reopen the shuttered fiber plant next year. The up-cycle is just starting to kick in so earnings should rocket per incremental revenue increase above break-even.
Corning is getting $241 million in fiber and cable products in Q3 and $64 million for fiber to the premise.

2- JCI, BWA,TRW,LEA. The point is the market for diesel emissions will grow to $1.2 billion-$1.3 billion by 2010, from less than $300 million in 2006.

3- Corning is inventing a lower cost way to test drugs. This points out the innovative ways Corning's R&D gets new business and markets. This is similar to the way the LCD glass business got started when optical fiber is all the rage. Am questing your assumption that onces LCD gets to 80% penetration, Corning's growth will slow down. Even in the computer monitor business at 80% penetration, AUO just said their growth in glass area is 40% yoy in their October 06 earnings call.

4- DowCorning illustrates the limited liability features of companies that Corning uses to survive. Please take a careful look at DowCorning since there is not much public data available.

My last point about FCF is you have to compute the earnings, growth etc for a similar period in time for a fast grower like Corning. You can't use trailing 2005 FCF and match it up with estimated 2010 growth rates. Since capital spending is the question here, a better estimate is operating cash flow for 2007-2010 to go with your estimated growth rate in 2007-2010.

From Corning's Conference Call: LCD Market Update

Corning is much much more than LCD glass.
1- It's telcom division is just at break even now. When the youtube driven video over ip takes over, demand for fiber to the home will explode. And Verizon is commited to spending billions till 2010 for FTTH.
2- The environmental division is just at break even or have slight profit even when the US auto industry is in a slump. The growth sector is in diesel filters where Corning have a 50% market share so far.
3- The life sciences division is plodding along also, but it's breakthrough in aiding the biotech/pharma industry to test new drugs could change things.
4-DowCorning is 50% owned by Corning and is a major supplier of polysilicon via Hemlock Semi. Polysilicon is high demand right now for solar energy.

You are mixing two different time periods in you arguments, forward domination and slowing growth of LCD TV's and trailing earnings and free cash flow.
If LCD gets to 80% penetration in 3-5 years and growth slows down, Cornings earnings and FCF from LCD will explode since no new investments need to be made to keep increasing units 100+% yoy. i.e. $1.3 billion can be save in 2006, 2007 etc.

From Corning's Conference Call: LCD Market Update

Trent is negative even on good news from Corning. The assertion that revenue growth won't match the penetration gains ignores TV size expansion.
ASP for LCD's is holding steady due to TV size expansion.
ce.seekingalpha.com/ar...
www.digitimes.com/disp...
content.infocommiq.com...;contID=99DF04A5-D5ED-...

The 25% LCD TV penetration rate is on new TV sales on a global market of $17.3 billion in 2005 with 5% unit growth in 2006 or about $4.5 billion.
times.hankooki.com/lpa...
www.digitaltvdesignlin...