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Politics : Formerly About Applied Materials
AMAT 267.87-0.6%Dec 5 9:30 AM EST
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To: davesd who wrote (9231)10/23/1997 10:26:00 AM
From: Teri Skogerboe  Read Replies (1) of 70976
 
Dave,

<It's one thing to come out and say that things look great and we will have a 30% sequential increase in revs next quarter, vs things look great and we expect a flat quarter next quarter.>

LRCX said they are building their backlog to industry norms; my understanding is that they are deliberately restraining revenues for this purpose (not by much). Also, they've had some company-specific problems with certain product lines. They admit openly that they have been losing market share. Of course, their goal is to reverse this phenomenon.

I thought this "story" told by Jim Bagley was enlightening. He said if you put two fabs side by side, Fab 1 and Fab 2. And Fab 1 is .35mu and Fab 2 is .25mu, then Fab 1 is not competitive and cannot make money in a world where they are in competition with Fab 2.

Fab 1................ Fab 2
.35 mu.............. .25 mu
not competitive
cannot make money

So they are pulling technology forward to get more die/wafer regardless of whether is 16MB or 64MB. Everyone is focusing on shrinking die size to .25. (So say my notes.)

All that said, I am cautious about the immediate future of the semi-equips, but VERY long and feel that Long-term holders will do fine in these quality companies. Quality companies that continue to give the Japanese TEL's of the world quite a run for their money.

Regards,
Teri

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