Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 260.77

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Dec 24 12:59 PM EST

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To: Ian@SI who wrote (13268)	12/14/1997 6:41:00 PM
From: davesd	Read Replies (3) of 70976

Ian...If these guys shut down the fabs..they would lose even more money...they have to make payment on the equipment that they already have. Every company is doing R&D on new technology and once they can prove that the new stuff will make them money or show that there is a compelling reason to move to it...I'm sure they will try to move to it. MU has $800 mill in the bank...why don't they go out and buy the latest and greatest .25u tools??? Because the payback isn't there. I think the next move by companies will be to reduce the shrink by better designs, this will not require much new equipment. Mu is an example...with very little investment in new tools they have become the #3 producer of DRAM from #10...they did this by shrinking the die design. Ian...imagine yourself in charge of a DRAM fab...you spent $1 billion last year on 200mm, .3u tools, your fab is in full swing cranking out chips and you are barely breaking or even losing money. You have $1billion in the bank...what do you do?? spend the billion on new .25u tools and hope that by the time you have to upgrade again..DRAM will be profitable?? or do you wait to spend the money when you see a clear turn in the DRAM market. I think FABs are more concerned about staying in business in this downturn than trying to marginally beat their neighbor by buying the latest current tools. The difference between the tools of last year and this year aren't that great. Kinda like the difference between a Pentium 233MMX or a PII 300Mhz. You don't upgrade everytime INTC puts out a new chip...you wait for a compelling reason to upgrade. dave

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