Darrell, I think you are missing the point in the BTB figure and what it is supposed to indicate, as long as it is above 1, it means we are still on the ascending side of the growth curve, when it goes under 1 the slope is changing and thus is the first indication of changing direction of the wind. In other words, it is so good (the shipments last month were so good), how much better can it be?
Look at the value of shipments of equipment, $1.84 BB (and I believe these cover only US producers of equipment, not a worldwide figure, but correct me if I am wrong). If you annualize this you get equipment shipments of $20 Billion +. Since equipment is only about 50% of the infrastructure cost of a new FAB (but please correct me here if I am wrong again), that indicates an investment rate in excess of 30% of sales. No business can maintain this rate of capital investment and survive. The market is saying that we have seen the best, we are at the peak of shipment, and from here we might have a period of retrenchment.
Zeev |
