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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (13)	7/20/1996 9:28:00 PM
From: davesd	of 132070

Mike I'm hoping that the smaller cap tool companies with advanced technologies will begin to move up earlier than the big ones. Even if this market is in a slow down, FABs will still buy billions worth of tools this and next year. It may be significantly lower than 95 and 96, but still a huge amount. I think in this case your arguments of " it's the margins not the sales". In chips which are commodity that applies, however, in the tool business the technology carries alot of weight. AMAT and LRCX actually increased the price of their etches in 1996 over 1995. If the industry spends 60%-70% of what it spent in 1995, that's still approximately 25 to 30 billion in FAB capital equipment. This will clearly hurt the AMATs and LRCXs of the world, but Small tool companies that have leading technologies and provide a clear advantage over existing technologies can still thrive in a market slowdown (maybe not as much as they would have in a booming market). Dave

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