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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 256.89-1.2%3:59 PM EST
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To: Proud_Infidel who wrote (11074)8/3/2004 7:13:48 PM
From: Cary Salsberg  Read Replies (1) of 25522
 
RE: "Year-on-year equipment sales are expected to drop well below the 50 percent growth already witnessed, as semiconductor manufacturers rein in expenses and recognize that they overshot their needs."

They got the growth rate right, "well below the 50 percent", but they blew the explanation because they don't even think right for a supposed "research" organization.

The story:

Once upon a time, semi manufacturers were purchasing equipment for new technology and fab capacity was not increasing very much. This was OK because fab utilization was low. Then demand picked up, utilization rose very quickly to much higher levels, and equipment orders increased "50 percent" because that level was needed to add capacity to meet added demand. Demand is expected to increase at low double digit rates, but sufficient capacity to meet this growth may be added by buying equipment at a low single digit growth rate. (Note: a real "research" organization would add the appropriate quantification to the story. I am looking forward to Q2 fab capacity growth and fab utilization statistics to compare to the recent semi and equip revenue (3 month moving average) numbers.)
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