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Politics : Formerly About Applied Materials

AMAT 292.20

-1.2%

Jan 7 3:59 PM EST

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To: Proud_Infidel who wrote (25947)	11/3/1998 4:06:00 PM
From: Katherine Derbyshire	of 70976

>> Additionally, once INTC begins their migration to .18 in earnest, won't other chipmakers in fact be forced to follow?<< If we have a V-shaped recovery starting in mid-99, what happens between now and then? 3-4 more quarters of flat or declining revenues sounds like a U-shaped bottom to me. INTC has already started their move to 0.18 micron. According to their publicly disclosed schedule (actual schedule may be faster), the time from initial ramp of the development fab to full production of a new technology is less than two years. I believe they have already begun to ramp the development 0.18 fab. Other chipmakers would certainly like to follow Intel. Whether they actually do so is a company-by-company decision depending on customer requirements and financial resources. A company with existing fabs running at 65% of capacity is not in a position to build more capacity. >>And if this is the case, AMAT and the other suppliers may not have enough capacity following the recent restructurings. Are we likely to see long waiting lists for equipment as we head into 2000 and possibly a Gold-Rush type scurry for equipment by the chipmakers? << Yes, I think we'll see long waiting lists and all the rest, though perhaps not as early as 1999-2000. An equipment Gold Rush is certainly good for investors, but not necessarily good for the industry as a whole, though. Wild swings are bad for engineering quality and tend to discourage innovation by bankrupting the innovators who aren't also blessed with good timing. Katherine

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