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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 162.77+2.6%3:59 PM EST
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To: shane forbes who wrote (4796)2/10/1998 4:54:00 PM
From: shane forbes   of 10921
 
The "interesting" part of the AMAT release:

''New orders for the first fiscal quarter of 1998 fell short of our initial expectations,''
said James C. Morgan, chairman and chief executive officer. ''The continued weakness
in DRAM prices, driven by excess capacity, combined with recent financing difficulties
in Asia, are causing many of our DRAM customers to reevaluate their capital spending
plans. In the first quarter, for example, a key Korean customer delayed a major
investment in a new DRAM site in the United Kingdom. Although we remain confident
about the long-term prospects for Korea and Japan, there is a high degree of
uncertainty regarding the near-term economic health of these regions and the related
effect on the demand for semiconductor capital equipment. As a result, we have
become more cautious at this time and expect lower new orders and less favorable
operating results than we originally anticipated as we entered fiscal 1998,'' continued
Morgan.

----

As expected they beat expectations and the orders have slowed because of excess DRAM capacity and AMAT's dependence on large customers there. We had discussed this yesterday. You can't ignore DRAM manufacturers in the semi-equip sector! You just can't... Unlike 1996 and even 1997 the big DRAM guys (and most are in that neck of the world) are hurting and cash-strapped.

Note also that Japan has been mentioned. As the WJ c.call indicated things look not so good in that part of the world and are getting worse.

Next indicator - the BTB for Jan.

Things will get worse before they get any better...

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