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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 139.60-6.2%3:59 PM EST
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To: Ross who wrote (8834)10/20/2000 9:11:38 AM
From: Ian@SI  Read Replies (3) of 10921
 
1. Many chipmakers have their customers "on allocation" for several of their chip products.

2. It takes 6-9 months to get all the new equipment ordered up to speed in a production environment.

3. There's a 3-5 month lead time for front end equipment; longer for leading edge lithography whereas test equipment is sold on a turns basis.

4. As the cycle heats up, more wafers are pushed out with existing spare capacity. This causes a spurt in the test equipment required. Once existing capacity is consumed, there's a 2-3 quarter pause while new capacity is brought on stream before the next spurt in test equipment orders. Longer delay is required with greenfield fabs.

I don't see any evidence that demand in the back end is falling off because of reduced chip demand. Rather, there's a bottleneck in front end processing giving the backend guys a bit of a respite prior to the next wave of orders as new capacity comes onstream.

IMO,
Ian.
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