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Pastimes : Asian Crisis
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To: Mr. E who wrote (5)5/9/1998 4:36:00 AM
From: shane forbes  Read Replies (1) of 16
 
Memory(DRAMs,SRAMs) and MPUs are 2/3rds of the chip output. Memory alone is typically 35% though with price reductions they are likely a lot lower than that - maybe 25% now? MPUs are around 40% now and with INTC's reductions semi-equip spending on these are down. The problem with DRAMs is that you have some of the largest semiconductor makers in the world all vying for a piece of the same pie. When that happens and there is rampant overcapacity these people do not order semi-equip equipment. MOS Analog and MOS Logic split the other third - analog is fine, MOS Logic showing some spotty weakness.

In summary DRAMs may no longer be the dominant piece of chip revenue but a lot of big semiconductor companies depend on DRAM and they are hurting big time. Thus DRAM semi-equipment ordering goes down. Thus the semi-equips suffer. The main point is that one should not link the chip revenue proportions to the proportionate share of semi-equipment ordering. (for instance MOS analog typically does not need to be too fancy and can get by with old generation semi-equipment. So though they may be 15% of the chip market they are likely a lot less than that for semi-equipment.) My guess is that DRAM and MPUs are still a disproportionate share of the semi-equip pie and if those 2 are going through issues (memory - overcapacity and pricing, MPUs - pricing and product transition) then the semi-equip industry will suffer.

Things are changing as the MOS Logic boys are becoming the leading edge guys (DRAM used to be the leading edge i.e., ordered the expensive equipment). Thus as Logic gets more and more important the semi-equips will depend more and more on the MOS Logic boys. But not yet - at least not in a really large way.

Shane.
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