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 147.44

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3:59 PM EST

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To: Mason Barge who wrote (5471)	5/20/1998 5:09:00 PM
From: shane forbes	Read Replies (3) of 10921

Mason: What is interesting I think is that the revenues have held up while bookings are going away. To me this means there ain't much new buying going on right now - all old stuff, perhaps mostly "maintenance" + "spare parts" minor upgrades that sort of thing. No huge spending jumps. Maybe Katherine can corrobate that out of traditional l/t revenues for semi-equips about 40-50% is for "semi- maintenance revenue" etc. (thanks to GP for this rough answer). But life is not good for the semi-equips. That's been my stance since mid-Feb - I see things perhaps (just perhaps) bottoming but I do not conversely see any acceleration off this bottom any time soon. Last time the lowest bookings were around 800 million (in 1996) or about 7% (annualized basis) of total semi revenue at the time (all guesses - ballpark numbers). This time I therefore expect worst case bookings of around 850 million. Right now we are at 1,070 billion. Add on some strength for isolated logic areas but remove DRAM people's propensity to keep on spending and this tells me we have a way to fall further in terms of billings - guesstimate - say low around 800-900 million (again I could say much lower but that's getting draconian again). Another way to look at it is in terms of AMAT's forecast of flat revenues for this FY (yet they said they expected 4.3-4.5 billion when FY 97 it was around 4.0 bilion !!!). Thus far after 2 quarters they have 2.5 billion. So they need 1.5 billion more. Yet they said they would not go below 850 million. So to give them the benefit of the doubt say 1.8 billion next 2 quarters. (that puts FY98 at 300 million above FY97 - a neat trick - around a 5% increase while the rest of the industry is going down 10-20%...) I figure for AMAT somewhere in the neigbourhood of 0.9 to 1.1 billion current q and then yowzah something around 0.7-0.9 billion or less next q (see their comments about the 850 are not consistent - actual results for Q4 could conceivably be much worse). This translates into a sharp reduction in revenues for the market leader - the only catch is that the bookings may not drop much faster for the industry as a whole (as a "rate"). So BTB might, just might start moving up sometime in the summer (in fact maybe a near term uptick as well?) Shane. (the litho question was way above my head. Punt!)

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