In 1999 annual report, AMAT says market for chips was $17.6 billion. "In order to meet the world's escalating demand for chips, this market is "projected to rise to more than $33 billion by 2004.
Brian, I am NOT surprised AMAT is the #1 momentum stock. Why? Because it is cheap. My discount brokerage showed a P/E of 42 recently. It's probably lower than that now.
Also, it will be hard to build the Internet without equipment from AMAT because the company is the largest supplier of semiconductor manufacturing equipment.
So, you need AMAT's equipment to produce those those chips that go into cell phones, personal digital assistants, global positioning system, video game consoles, PCs. Even Nike gets in on the act and comes out with palm-pilot size consoles that measures how many calories you burn when you run x miles!!!!
"Increasingly inexpensive and sophisticated embedded microprocessors have also opened the floodgates for imaginative Internet appliances, like wireless organizers that display e-mail, stock quotes and even web sites. Microprocessors are also spurring the dispersion of computing power from PCs into a multitude of other products." (From AMAT's 1999 Annual Report)
The number of gadgets that need chips explodes!! Morgan looks ahead so, I believe AMAT, will do very, very well in the future because the company has or will:
1) shrink linewidths of semiconductor devices.
2) use of new materials (like copper)
3) move to large wafers
In 1999, "new orders increased 53% over orders for 1998."
I believe future orders are up there as well!!!
Cheers,
Mephisto |
