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Politics : Formerly About Applied Materials
AMAT 328.51+1.9%Feb 2 3:59 PM EST
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To: derek cao who wrote (8223)9/26/1997 5:57:00 PM
From: Big Bucks   of 70976
 
Derek,
True, however, that old equipment still can have an additional
10 year life if sold to other manufacturers as "used"equipment.
It will still have value in the market and could affect "new" sales
to potential customers which could negatively affect all the semi
equipment manufacturers. Only leading edge companies with lots
of income and capital can afford the newest "state-of-the-art"
equipment, and it is extremely expensive to facilitize and install a
sophisticated piece of equipment. Installation charges alone can
cost $200K-300K for each piece of equipment. The Equipment
itself ranges between $2M and $5M each, depending on configuration and features. Add to this the spare parts, and specialty
training, and engineering and service support and the cost per
system ranges between $4M and $7M per piece of equipment.
That's a lot of chips to sell to recover the initial and sustaining cost
before it is fully depreciated and is paid for. Yearly sustaining costs
range from $300K to $500K per piece of equipment. To put this in
perspective consider that there can be 15 to 100 pieces of the same
equipment in a fab for each step of the process. That is why new
fabs cost $2B to $4B. Huge investment required.

Regards,
BB
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