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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 148.32-3.3%Nov 14 9:30 AM EST
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To: Jacob Snyder who wrote (10279)3/6/2002 6:58:41 PM
From: Cary Salsberg  Read Replies (1) of 10921
 
I am not predicting a change in the cyclicality, I am saying the current situation is unusual.

First, we ARE having a "stretched-out down cycle!" Orders have been relatively flat for months and predicted improvements are small.

As you point out in a follow-up post, cycles have been created by supply, not demand. Demand had been following a steady, rising, secular trend. This down "cycle" was caused by demand decimation.

The up "cycle" must wait for demand to rise enough to create undercapacity. The most likely potential undercapacity situations will be in leading edge technology. This will not cause mass fab building because the leading edge is always a small percentage of production and it may be addressed by upgrading tools in existing fabs.

Eventually, demand will create an undercapacity situation and the industry will return to your "normal" cycles by overbuilding and reaching new highs in semi-equip revenues.

I understand what Zeev is saying in his response to my post. I am not sure what will cause semi-equip orders/revenues to double before the consumer recession. I would expect the consumer recession to be the result of an anemic recovery in business spending which allows a continuing deteriation in the employment picture.
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