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Politics : Formerly About Applied Materials

AMAT 281.58

-3.6%

Jan 8 3:59 PM EST

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To: Ian@SI who wrote (27630)	1/9/1999 11:13:00 AM
From: PAinvestor	of 70976

Hello Ian. You are on the right track. Actually most of the capacity built by the industry was between 0.3 & 0.4 micron, designed mainly for 16meg production. That capacity became rapidly obsolete after the industry leaders began a rapid shrink to 0.25 micron and a cross over to 64meg production began. You are right, there is no excess capacity out there. You may want to check some of my posts on the MU thread for clarification of this. With shrinks, you don't need as many new fabs just retooling of existing lines, so a recovery in the equipment companies is going to be patchy at best. Capex levels are going to see growth from last year, but the equipment purchases are going to be relatively smaller as a percentage of output than they were in previous cycles, not to mention that we will probably begin to see price competition between the equipment companies themselves, something that was also absent as well. BTW, do you know how AMATs CVD biz is doing currently?

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