I will grant you that the timing of my sale was not good. Life is
like that sometimes. No one is perfect, and I certainly am not.
Nevertheless, I still watch this company for a variety of reasons.
My feeling is that if DRAM prices hold at todays $11 range (for 16mb
DRAMs) for another 3-4 months, the whole picture will start to change
for the semi industry. Also the .99BTB was also a positive note. If
the downturn does not last much longer, the deal with Electotech will
be a good one, and PMAT will indeed be positioned for excellant
growth in the coming years.
On the other hand, Michael Burke argues on his thread and the Micron
thread that DRAM prices will fall to the $7 range in January. If
this happens, the downturn could last much longer. In any case, the
downturn in equipment sales will last 6-12 months longer than the
downturn for the actual semi industry. Let us say that the downturn
does in fact last another 12 months for the semi industry, and there
are some reasons to believe that it might, just as there are reasons
to believe that it won't. That would imply that PMAT would have
somewhat reduced sales for probably the next 18 months. 18 months
would be sufficiently long for companies like AMAT and LRCX to try
to match the capabilities of the PMAT etcher, and also forcefill/
flowfill. Thus PMAT would come out of the sales downturn in a cash
weakened state into a world with increased competition.
When I sold my stock, I was not anticipating the immediate rise in
DRAM prices, and I foolishly did not take into account the impact that
the convertable roadshow would have on the stock price. Nevertheless,
the problems facing PMAT are still real, and unfortunately many of
them are related to the industry in general, and are thus outside of
their control.
Certainly I wish the company luck, and also the investors. I may buy
additional stock in the future, but it will largely depend on the
state of the semiconductor industry in general, and the speed with
which competitors are able to match PMAT in performance. Personally
I think that the sidelines are the safest place to be for the next
4 months.
Carl
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