The foundry sector is deeply cyclical since it's directly tied to wafer supply, explains Fitzgerald. So the best buying opportunity is always in the worst periods for fundamentals, advises the analyst. But he expects semiconductor stocks to recover coincident with, or even in anticipation of, a cyclical uptick in utilization rates. Ward admits that it's difficult to call the exact bottom of a cycle. TSM offers a favorable risk-reward ratio, says Ward.
Low valuations mean low downside risk and high upside potential.
If he's right, semiconductor stocks will again spearhead the stock market's rebound, as they have consistently done in the past. Bid on or offer business services Web design, logo design, computer consulting, and more. Business Week Online may receive a share of any fees you pay for services. The McGraw-Hill Companies Inc. All rights reserved.