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Politics : Formerly About Applied Materials
AMAT 220.28-6.4%Nov 20 3:59 PM EST
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To: Warren who wrote (14064)1/2/1998 6:42:00 PM
From: Big Bucks  Read Replies (2) of 70976
 
Warren,
Thanks for the info. The projections may be optimistic or outdated
since manufacturing efficiencies are increasing and it seems likely
that a "glut" of chips like DRAM, EEprom, Flash, and soon
Microprocessors will require the manufacturers to reduce spending
on fabs and equipment, short term. There have been numerous fab
"delays" announced over the last 2 months or so as profit margins
decrease due to over capacity.
This is part of the "fear factor" or uncertainty prevalent in the
semi/chip/equipment market right now. The economic situation in
the Pac Rim countries makes their chips cheaper to produce and sell
than American companies can. Profits are what pay for new fabs and
new equipment and the profits are becoming very slim or non-existent
in certain markets.
It is likely that the delayed fabs will become viable around year
2000 as the world economic outlook improves from the current
situation.
We will be seeing Q4 earnings for many US companies over the next
2-4 weeks and that may determine the outlook for semi-related stocks
for the rest of the year. The conference calls will likely lay out
the projections of growth/expansion and earnings potential for 1998.

Just my opinion.

Regards,

BB
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