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Politics : Formerly About Applied Materials

AMAT 289.91

-9.0%

2:11 PM EST

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To: Tito L. Nisperos Jr. who wrote (8251)	9/28/1997 1:11:00 AM
From: davesd	of 70976

Tito, I remember in 1995, MU's earnings estimates for 1997 where $17 per share...they barely made $1.50. Also, in 1995, I remember that there were over 150 new FABs projected to be built due to the huge demand for chips...and even with all the projected new fabs there was still going to be a shortage of capacity. Unfortunately, that never materialized...as a matter of fact we fell into a slump in the chip industry and over capacity, even with the cancellation of the majority of the new planned fabs. I get the same feeling now, folks are of the same thinking as 1995. No matter how you slice it...there is lots of capacity out there. Currently there is alot of positioning going on by the major chip producing countries...each one comes out with a bigger investment number than the other, it's almost an ego thing going on. Lets see if they put their money were their mouth is. Another reason for a slow down may be the transition to 300mm....300mm and .25u/.18u is going to be the next technology after 200mm. I'm sure any new fab's being planned now are being planned for 300mm and plans for 200mm will be curtailed as we go forward. However, 300mm is not ready yet, at least not for about 3years (real production). So the question is...how many new fabs will want to invest in 200mm in 1998/1999 when 300mm is right around the corner in 2000. As someone said..no one wants to build the first 300mm fab yet no one wants to build the last 200m fab. So there may be a transition slowdown. Throw in the DRAM stuff and there is a good change that bookings will start leveling off soon. Just my opinion. dave

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