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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: eabDad who wrote (19454)5/14/1998 12:17:00 PM
From: shane forbes  Read Replies (3) of 70976
 
Now for the dumb question:

When they say that 20-25% is around the level that chip companies ought to be spending in terms of capital spending does this mean that only 15% - 18% should be spent on equipment? (based on your 75%/25% split)

If so then assuming that SEMI is the ok number to use and 25b is the ok number for equipment then at 16% we are right in the ok range for 1998 since chips should be around 150 b. this year. Now if instead of 25b, we have Katherine's 32 then we are 21% - a bit high.

Gut feeling is that anticipated spending on chip equip. is reasonable to low this year and that bodes well for the chip companies (not too concerned about DRAM - that's a "medium-sized" (was huge) beast with too many chip company fingers in the pie).

Shane. (I'll check to see how the semis report. For instance if INTC says 4.8 billion in cap. exp for 1998, is this only for equipment or everything? - everything based on what you are saying but then again from Katherine's article I think it said 4.5 billion in 1997 for just cap. equipment - so something is not right - since I don't think INTC spent 6 billion (again based on 75%/25% split) last year on capital spending. I'll have to check though.)
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