Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 154.46

-5.3%

3:20 PM EST

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To: Zeev Hed who wrote (8564)	9/14/2000 11:10:00 AM
From: Ian@SI	Read Replies (1) of 10921

Zeev, Thanks for the detailed response. ... especially as I don't agree with most of the assumptions made. :-) the fundamentals might be strong, but they are no longer "strengthening". As the sector recovered from the most severe downturn in its history, the growth was breathtaking. Last year's rate can't be expected. But we will continue to see the sector grow much faster than the overall economy. e.g. 40% plus vs 5% to 6% at best for the GDP. YOY comparisons are not going to see the same percentage growth as we have seen recently Completely agree. To which I add, "So what?". The growth will still be much higher than most other sectors of the economy; the street will reward that growth once they're convinced it's for real. I believe that the current cap ex in the industry cannot be maintained Completely agree. CapEx as a % of chip sales is at an abysmally low percentage. This rate of investment will lead to prolonged capacity shortfalls in which chip availability will continue to be the bottleneck preventing a higher rate of economic growth. Capex must double from current levels within the next 2-3 years just in order to hold capacity utilization at its 95%+ level. I also believe that next year we will have a bear market in general Disagree. I see nothing that will bring on a bear. that the peak in equip shipments will probably seen sometime next year, not 2003. There's a bold prediction. The only way I could see that happening is if the Communications Networking revolution was stopped dead in its tracks; the proliferation of chips into every aspect of global life is repealed; and some massive global economic calamity brings upon a depression. Honestly, I just can't see a scenario that would call for no growth for 2001, 2002 and 2003. You'd have to predict that the chipmakers aren't going to improve their technology, productivity or capacity. And that just hasn't happened in the sector's history. Look at AMAT, the peak here in April already discounted quadrupling of the shipment rate at the trough. So? If I remember the trough shipment numbers, they already have quadrupled, or very nearly so. And I expect that for capacity reasons alone, they need to double again from today's levels. Either the world stops its progress, or the sector thrives. Best regards, Ian. P.S. (I might be willing to concede that the real truth might lie somewhere between our 2 views. But it would be a lot closer to mine. <vbg>)

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