Jim, a few thoughts in response to the last several postings (These
are not all referencing your message in particular):
1) Holding Novellus, Applied, and Lam is not really much
diversification. That is, all are in the film deposition business,
albeit, that is a bigger percentage of the business of the first two.
If you really want diversification within the semiconductor industry,
you might look to one diversified equipment maker (LRCX, AMAT,
NVLS), one small and faster-growing equipment maker in an
emerging field (Speedfam is my favorite), and a semiconductor
manufacturer (AMD is my favorite at current prices). You could
add a stock like KLIC, TNCR, or KLAC if you want to, but the
added diversification is not that significant (of the three, KLAC
has the best technology, but the stock is on the expensive side).
2) LRCX is a great stock because (A) it has plenty of cash to weather
any downturn, (B) it already has a technology for the 0.25 micron
generation that is manufacturable, (C) the management is good,
(D) it is cheap relative to its growth prospects, and (E) they have a
large, loyal customer base.
3) One of the comments expressed earlier suggested that AMAT
was too busy to invest in R&D. That's crazy. They are entering
into the CMP business, and they are trying to develop products that
are adequate for the 0.25 and 0.18 micron technologies. They have
some offerings, but many customers are demanding more
manufacturing-friendly solutions (higher uptime, better process
results, lower cost of ownership). They are spending a fortune
bringing these products to market. |
