Robert: Since Larry likes to base his decisions only on trend, I will try and emulate a fundamental reason for the decline. I know you already told me that WFR is committed to keep its leading place under the sun, and it is quite possible that the market fears that this will cost WFR in margins. FERO finished a bang up years, this means a lot of new pullers have been put into operation in expectation of the continuing 20%+ expansion of the chips business. However, something funny happened on the way to the bank, billions of dollars in foundry expansion (for which the new wafer capacity was built) have been put on the back burner. What do you do? You try and compete for the smaller market. Since most of the large suppliers are quite equal in quality, the next thing you compete on is guess what? price and service. Well, there is not much service in the wafers business, so you compete on price, what happens next? margins decline. This is what I think is driving the price down, fear of margin erosion. Fear of wafers glut, fear that the world is ending. This fear will pass as well but it will be grossly overdone before it is over. And who do you think will give us the first sign that it is over, Larry of course, because his candles are going to whisper to him, there is a paradigm shift going on. Three or four weekly white candles in a row, or some giberish like that (of which I am completly ignorant, nevertheless, a strong believer).
Zeev |
