An Intriguing Options Play On MEMC Eletronic Materials
By John Mylant: MEMC Electronic Materials (WFR) supplies silicon wafers to semiconductor and photovoltaic cell companies. The company's success is closely tied to the semiconductor industry. The semiconductor industry is then fueled by mobile phone and solar power growth. A silicon wafer is a commodity good, which means that pricing is really the only way to differentiate it. For this reason, competition will continue to cut into profits as companies battle for market share. A silicon shortage will increase prices, while an overstock will reduce prices. From a robust business just 5 years ago, MEMC fell on hard times. Much of its downward spiral has been attributed to its exploration in clean energy over the last 4 years. It provided raw materials for solar panels and also got involved in solar projects, spending millions but showing nothing for it. The company is trying to put itself back together. The semiconductor industry has notComplete Story »
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