Cary: While I understand and respect your opinion relative to AMAT guidance in the Nov. conference call and I agree with you insofar as it will provide an excellent glimpse of the market ***at that time***, one can gauge the semi equipment market at any time prior to the AMAT conference call by calling AMAT or other companies over the month to see if anything has changed. You can bet the analysts will.
In any event, here is the situation according to Bagely:
Bagley's View -- Some quotes from the Lam conference call with particular relevance to current issues:
"Concern has also been raised with regard to currency difficulties
in Asia. Since most of the output in wafer fabs are sold in
dollars, the ability to invest in added capacity should be be
largely unimpaired. My concern is more focused on the reduction in
dollar based discretionary spending on the part of consumers in
Asia. Growth in consumer spending in Asia has been one of the
drivers for increased semiconductor consumption by PCs and consumer electronic devices. I would me more comfortable if DRAM prices and currencies in Asia would strengthen. Even with these difficulties. I am positive about the semiconductor and semiconductor equipment industries. These difficulties call for prudence and not panic.
...
Our product mix is heavily biased toward .25 micron systems. When
I look at what the DRAM producers are doing (Roger and I just got
back from a tour of major customers in Japan) it is pretty clear
that everyone is focused on shrinking the die size on 16 mb
production and moving as quickly concurrently to 64 mb production
because the bit price continues to come down.The only way you are
going to get more revenue is that you either have to build another
fab and process more wafers or you have to get more bits off of
each wafer you are currently producing, which is what everyone is
attempting to do. So in essence they are pulling the techology
forward. If you have two companies sitting side by side and one is
on .25 micron, 16 mb and one is on .35 micron, 16 mb, the .35 guy
is non-competitive. So if you two facilities running within your
company, one on .35 and one on .25, in the current market -- at the
current pricing -- the .35 -- I don't believe can make money
compared to the .25 micron. So if your capacity ages at .35 or .50
micron and you are competing with people who are on .25 micron and
maybe, in the very near future, as small as .20, they are going to
get alot more die per wafer, regardless of whether they are
building 64 or 16 mbs, and they are going to be able to price you
out of profitability. So if all of your capacity that is on larger
feature size -- I don't think it is cost effective and it is, in
essence, obsoleted for memory capacity. They may look around for
something else to do with it, but it is not going to serve the
memory market at all. That's my view." |
