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Politics : Formerly About Applied Materials
AMAT 270.13-1.8%Dec 11 3:59 PM EST
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To: Gottfried who wrote (31929)8/14/1999 1:59:00 PM
From: Ian@SI  Read Replies (1) of 70976
 
G.,

You're confusing yourself with the facts. ;-)

The analysts have convinced themselves that "This time, it's different!". Well, the same as most other times, this time the analysts are still full of it.

Analysts have grabbed a thesis that there will be a 3 quarter surge followed by a 2 quarter recession. No fundamental case supporting this thesis has made it to print. Probably because the fundamental case doesn't exist.

Further the analysts seem to be hypothesizing that this time the chip makers won't spend any portion of increased revenues / earnings on improving their fabs. That hypothesis is completely without any basis in reality. Just a bare unsupported statement in their reports. It ranks right up there with;

1. Your car will be ready on Tuesday.
2. The check is in the mail.
3. And, Of course, I promise not to ....[I'm sure all readers can complete the world's greatest lie.]

I suspect that just the 300mm pilots alone will sustain many of the equipment makers throughout the next few quarters. Those pilots lead to production capacity orders. Foundries are running at more than 100% capacity, something that they can't do indefinitely without suffering equipment failures. Capacity builds are happening and will continue to happen barring some unforeseen massive economic shock. And no, Y2K isn't going to do it, Yardeni.

JMNSHO,
Ian.
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