Lam Research (LRCX, NASDAQ): To the Insiders Message Board

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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders

LRCX 222.96

+2.5%

Jan 16 9:30 AM EST

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To: Jong Hyun Yoo who wrote (5243)	2/18/2005 8:58:34 PM
From: Cary Salsberg	Read Replies (1) of 5867

Hi, Thanks for your analysis. One correction, gross margin was 44%, not 41%. Also, to amplify the PVD situation, CEO Hill said that AMAT PVD tools that had sold for $7M, were being sold for $4M. You did not include shipment levels compared to manufacturing capacity as a factor which contributes to gross margin. As has been mentioned, shipments are lumpy and different customers result in differences between the two in shipment levels. The general consensus is that customer mix favored LRCX in the last quarter, but that AMAT will be favored next. LRCX has forecasted an 18% drop while AMAT flat to down 10%. So, gross margins need to be averaged over a few quarters. I think your analysis is a good model to start with, but I need to verify some of your numbers before I would accept "very poor" margins instead of below average margins.

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