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Politics : Formerly About Applied Materials
AMAT 267.08-0.4%Dec 9 3:59 PM EST
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To: Gottfried who wrote (35507)6/21/2000 12:24:00 PM
From: Gottfried   of 70976
 
Mitch sent his thoughts...

>Gottfried, as always, feel free to post this to SI:AMAT or trash it. I trust
your editorial instincts.

For those who know a little calculus, I think the recent B-to-B shows an
inflection point. That's where a curve changes curvature from convex to
concave (bowl-shape to dome-shape), or vice versa. That doesn't mean the
slope immediately goes negative, so I don't think it's an imminent crash -
the industry is *still* adding to backlog. In other words, I think AMAT is
*far* from topped out.

To use an automotive analogy, the Wafer Fab Equipment industry has gone from
panic braking two years ago to pedal-to-the-metal acceleration now. Just
because the pedal is lifting slightly from the floor doesn't mean the brakes
are getting slammed again - it just means we're getting closer to an
equilibrium level.

Look at the trouble the Chip industry has adding capacity, and consider how
much *more* difficult it is for WFE suppliers to ramp. That's what I think
has generated the prior B-to-B disparity, and why shipments appear to have
flattened. They're flat-out more so than flattened.

However, I would take the inflection change as a long-lead-time indicator of
an eventual slowdown, absent any other accelerating factors. The 300mm and
Cu trends will likely emerge as an upshift and slam that pedal back down.

When Chip companies begin *canceling* orders - shoving the B-to-B towards
and below 1.0 - that's when I'll worry about the next top.

- Mitch Cobb<
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