10 Things to Watch in Tech: Semiconductors

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SAN FRANCISCO -- Like the 20,000 people in Punxsutawney, Pa., who huddle around an oversized rodent each year in hopes it will usher in spring, semiconductor investors are eagerly awaiting the first signs of thawing in the chip industry's 12-month cold spell.

But what to look for? Should you pay attention to back-to-school sales and Christmas sales? How crucial are new products like the new microprocessor K-7 chip from

Advanced Micro Devices

(AMD) - Get Report

?

No worry. Below are 10 events investors should keep an eye on to monitor the health of the chip industry.

Sept. 13-18:

NationsBanc Montgomery Securities 28th Annual Investment Conference

, San Francisco

Watch for feel-good talks from 13 semiconductor and equipment makers. One highlight promises to be a presentation by

Micron Technology

(MU) - Get Report

, a DRAM company that reports earnings late September. Micron is one of the few in the sector that reports earnings off-calendar -- its fiscal year ends at the end of August. Fund managers will be watching to see if the company can sustain the growth in unit volumes first reported at the

Robertson Stephens

conference in July.

Oct. 13-15:

Microprocessor Forum and Embedded Processor Forum

, Palo Alto

Although a gathering strictly for the chip-nerd set, chip companies tend to disclose the designs of their latest products. Watch for Advanced Micro to release the technology design behind its K7 chip, in preparation for the chip's full unveiling at Comdex in November. Expect other players such as giant

Intel

(INTC) - Get Report

,

National Semiconductor

(NSM)

,

Digital Equipment

and

Motorola

(MOT)

to also unveil some of their latest designs. It is here that the first cheers or pooh-poohing over new products will be heard.

Oct. 13:

Intel Earnings Announcement

Chip-stock analysts tend to yawn at the mention of third quarter earnings. But last year a 38-point drop in the

Dow Jones Industrial Average

was attributed to adverse reaction over Intel's disappointing third-quarter earnings announcement and its projection of a poor fourth quarter to come. Semiconductor investors can't forget that this also pushed the

Philadelphia Semiconductor Index

down a long slide from 378.75. Since then the SOX has dropped 42%.

Oct. 19-21:

Dataquest Semiconductor Conference

, San Diego

For those who care more about product prices and company profits, technology research group

Dataquest

brings together industry statisticians and forecasters to give their best bets on future trends. For number crunchers this could be heaven.

Oct. 19-23:

Networld

and

Interop

, Atlanta

Growth funds that won't touch Advanced Micro or Intel have been investing in companies like

Broadcom

(BRCM)

and

Vitesse

(VTSS)

, which provide the booming telecommunications industry with specialized chips that enhance delivery of data over networks and the Internet. The conference is the largest gathering of networking, Internet and intranet experts and last year featured keynote talks from executives of

Cisco

(CSCO) - Get Report

,

Lucent

(LU)

,

Sun

(SUNW) - Get Report

and

Tivoli Systems

, owned by

IBM

(IBM) - Get Report

, on the problems and promises of voice, data and video integration.

Nov. 8-11:

American Electronics Association Classic Financial Conference for Public Companies

, San Diego

"There is an old industry saying, 'people buy at the AEA and sell at H&Q,' " said

CIBC Oppenheimer

semiconductor analyst Ken Pearlman. "That was when the industry was a lot more predictable." Autumn is a positive environment for chip stocks, with investors wanting to believe that Santa will bring them plump sales. But these days, the selloff begins as soon as the numbers show that Santa is not delivering and that will happen much earlier in the year than

Hambrecht & Quist

April technology conference.

Nov. 11: Annual sales forecast by the

Semiconductor Industry Association

Semiconductor industry chiefs get together once a year over a press conference and lavish dinner and talk about the good times that are coming. Last year, the Philadelphia Semiconductor Index rose 11% in the week after the association announced that chip sales would surge 17% for 1998. Trouble is, by June they had pared that forecast down to a 1.8% decline for the year.

Nov. 12:

Dell Earnings Announcement

Dell

(DELL) - Get Report

reports third-quarter earnings. Michael Dell is the poster boy of the computer industry and all eyes will be on him to see if he can deliver any special good news to Intel. Dell's servers using Intel chips are leaving competitors behind. Can Dell do it again?

Nov. 16-19:

Comdex

, Las Vegas

The Rose Bowl Parade of technology events. While Comdex usually promises to be an overhyped lovefest between technology partners, there might be a tad more drama this time out. In the keynotes by

Microsoft's

(MSFT) - Get Report

Bill Gates

and Intel CEO Craig Barrett people will be listening not only for signs of a healthy PC market but also for signs of trouble in the

Wintel

marriage. Will the boy wonder still be smoldering over Intel Chairman Andy Grove's recent kiss-and-tell testimony to the feds about Gates' strong-arm tactics? Look also for news from Intel of a Rambus-specified chipset and the reception given to Advanced Micro's K7 chip.

Nov. 27: The day after

Thanksgiving

It's the official start of the Christmas shopping season. If shoppers aren't outside

Macy's

at the crack of dawn ready to bust those doors down, chances are they aren't dialing 1-800-GATEWAY either for that perfect sub-$1,000 machine for the kids. You can bet the semiconductor sales force will be closely watching those crowd counts. And so should you.

Street Sightings:

Chat with

TSC

Editor-in-Chief

Dave Kansas

at 9 p.m. EDT Sunday night on Yahoo!. Go ahead and register in advance if you haven't already (it's free and just takes a few minutes). The address is

http://chat.yahoo.com

.

For more info on institutional holders of these stocks, as well as financial statements and earnings estimates, please see the

Thomson Company Reports.

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