Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 230.17

-1.4%

Nov 7 9:30 AM EST

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To: Paul V. who wrote (30926)	6/10/1999 8:51:00 AM
From: Katherine Derbyshire	Read Replies (2) of 70976

The BtB typically peaks at the beginning of a cycle, as I've pointed out before. It's not clear whether Wall Street understands this, though. 300mm shouldn't really have that much impact on orders--the equipment was going to get bought anyway, this just changes the mix. Individual equipment selling prices and manufacturing costs will both go up, but equipment company margins are likely to stay about the same and the higher capacity of 300mm may reduce the absolute number of pieces of equipment sold. Substantial advantages will accrue to the equipment companies able to make the transition fastest. Lithography tools are the most likely bottleneck, so the litho sector would be worth watching carefully. So far, this is looking more like a "typical" cycle than 1996-97 did. Assuming underlying semiconductor revenues continue to improve, we should have about two years of good news ahead before the next down cycle. And yes, we can expect the boom/bust pattern to repeat itself. You'll know it's time to get out when the pundits start saying "it's different this time." Katherine

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