Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 148.32

-3.3%

Nov 14 9:30 AM EST

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To: Proud_Infidel who wrote (4308)	1/5/1998 9:19:00 PM
From: Jay M. Harris	Read Replies (3) of 10921

Brian, this analyst is bullish on INTC spending. The .25 Micron process ramp at INTC would support his thesis during the first half of 1998 as .25 micron equipment is more expensive. The ratio of equipment spending to INTC revenue @ 20% while healthy, may be optimistic. This is because the most bullish of PC industry unit growth estimates for 1998 are for 17-18% growth with the better analysts (IDC & Morgan Stanley) calling for 13% to 15% YOY growth. Intel will not be able to gain market share in 1998 with CYRX and AMD finally having decent product, and having designed into some tier 1 OEM's like Compaq and IBM. Intel is already aggressively lowering prices to stave off AMD at the now "low end" at 233 MHZ.. AMD is having yield problems at 266 MHZ ,and INTC will have 450 MHZ in the channel in q4 '98 as the .25 micron ramp is progressing 6 months ahead of schedual in terms of yield per wafer. INTC is an execution machine and is raising the competitive bar. Now, I have posted on the IPEC thread before about how Andy always talks up his cap ex at the beginning of the year to get the equipment guys to jump into his bed. Once the equipment execs jump in, and give him price concessions, he guides them down on orders over the course of the year. I know this from following IPEC which is Intel's CMP providor and I've experienced it with other equips as well. While it is possible for the $5.4 billion to be spent in 98, I don't believe it is probable. I personally think Andy will blow his cap ex on the Merced Chip (64 bit architecture) around q1 &q2 1999 at .18 micron. This could be the death nail for the clone competition. Frankly, if NT 5.0 with wolfpack clustering was a 64 bit OS, I think Merced would have killed UNIX and the Sparc architechture by the end of the decade. I still believe WINTEL will prevail, although NT 6.0 will be required to take full advantage of the Merced performance before Sparc and Unix are run out of town. Just one man's opinion, jay

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