Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 230.92

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Nov 24 3:59 PM EST

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To: davesd who wrote (13721)	12/21/1997 3:59:00 PM
From: Steve Robinett	Read Replies (3) of 70976

Dave, Let me keep it simple--yield. If two farmers produce 10 potatoes per acre for an hour's work and can sell those potatoes for more than it cost to produce them, they're happy. If one of the farmers buys a machine that lets him produce 15 potatoes per acre for an hour's work, he can spread the cost of the machine over many seasons and sell his potatoes cheaper and still realize the same profit (increased productivity). The other farmer has two choices, increase his yield to compete or go out of business because his potatoes cost too much. Chip makers are in the same position, increase yield or price themselves out of the market, an existential dilemma they'll resolve, IMO, by finding money for equipment. Best -Steve

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