Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

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Nov 19 3:59 PM EST

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To: Gottfried who wrote (4720)	1/3/2003 11:23:44 PM
From: Sarmad Y. Hermiz	Read Replies (3) of 25522

>> Either chip makers have enough capacity or they have cold feet. Gottfried, Regarding the 2nd chart showing semiconductor shipments. home.attbi.com It shows shipments of $3B/month in late 2000. That was 2 years ago. Obviously there was fabrication capacity to produce all those chips. Now semi shipments are at half that level - under $1.5B/month. I wonder how that works in terms of units. Obviously capacity is for units - not dollars. Assuming that the useful life of fabrication equip is several years. It seems there is enough equip in place to take care of all the old applications. So I assume only new designs need new fab equip. And how long does it take for "new" chips to become the majority of chips ? Prior to mid-1999 there were no Intel Pentium processors at the 1 GH speed. Since mid-2002, you cannot find any Pentium chips slower than 1 GH. I assume that increasing the speed required new fab equip. So possibly 3 years is the life-time of a chip design. I think the same logic and timing applies to how digital cell phone service displaced analog. And maybe also to how LCD panels are displacing computer monitors. And DVR'd are displacing VCR's. And DVD's are displacing tape. So my spotty argument tells me that even though there is 50% unused capacity, it will all be obsolete by the end of 2003. Which may still be considered a U in Jacob's reckoning, rather than a V. However, very likely most investors will want to be long rather than short well before the end of the year. Sarmad

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