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Politics : Formerly About Applied Materials

AMAT 268.79

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3:59 PM EST

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To: StanX Long who wrote (58878)	1/16/2002 1:05:08 AM
From: robert b furman	Read Replies (2) of 70976

Hi Stan, Barrett was on CNBC after hours. He said that 300mm yields twice as many chips as 200mm. When queried about Capex reduction he said. 5.4 million in 02 will buy us as much capacity as 7.3 bought us in 01.His reference was again to the increased yields that 300mm offered. A bit ironic as Morgan always said 300 mm would be the driving factor for growth in equipment.In the beginning ,and Intel is the first production run 300mm line,300mm results in less $ of equipment orders. With Intel not really being forced by AMD in the high frequency chips offerings,they should benefit with better margins - but no strong pressure to produce more (initially at least). When/if demand grows and competition reduces price, Intel can play the game Micron just did with Hynix. I doubt they (Intel)would.Sooner or later AMD has to get nervous as 300mm yields apply to celeron and lower frequecy processors. Somewhere in that transition, all chip makers must prepare for price competition based on 300mm efficiencies. The degree to which the competition worries about Intel's lead,will determine the "overall growth of the equipment sector". If product cycles life is any indication - it can't be too far behind. Perhaps the only winners of this transition is the backend equipment manufacturers, as the unit count still requires a certain quantity of bonders,handlers and testers. I may be dreaming ,but didn't Intel trade down in afterhours last quarter, and recover in the premarket hours. I think I remember CNBC saying the analysts had the night to pour over the numbers and now think it's a good story.Of course that was at a stock price below current levels. Bob

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