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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 148.83+3.9%Nov 19 3:59 PM EST
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To: Cary Salsberg who wrote (8840)10/20/2000 12:02:57 PM
From: Ian@SI  Read Replies (3) of 10921
 
Actually, I left out half the story. (maybe that's why it was so much better than my normal post. ROFLOL)

Cycle ends when:

1. Demand dies for whatever reason. Triumph of the luddites, Asian Contagion, new non-semiconductor technology which costs nothing and does everything, whatever.

or

2. Installed capacity substantially exceeds demand for an extended period (more than a Q).

This translates into no growth in wafers processed, no incremental demand for backend stuff, sharp reduction in capacity related orders, increased evaluations of wonderful new gee whiz technology, whatever. except AMAT doesn't have many orders over $100M to report during its conference calls.

Signs of demand again exceeding capacity usually are seen in the back end first; as more wafers are processed with existing front end equipment such that the backend capacity is inadequate.

IMO, what we're seeing now is huge unmet demand. No front end capacity to produce more wafers. The shells have been filled out. Now the tough capacity (greenfield) is being added. Soon we'll see the backend pick up.

I could be wrong. Even if Cary doesn't remember, I was wrong at least once before. ;^)

Ian.
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