Mason and Thread,
Some questions for those with more knowledge than I have:
Although semiconductor equipment stocks go up and down in accordance with their earnings prospects which follow the cyclical nature of the semi industry, it occurs to me that in many cases "the baby has been thrown out with the bathwater"; this seems to have been the case recently. Some companies which are lumped in the semi-equip field actually derive much of their income from consumables. Thus, the income of these firms should be less cyclical, unless semiconductor production itself drops, which doesn't seem likely.
I have read somewhere recently that Dataquest, I think, predicted that semiconductor business would grow 6% this year. This, I believe, is in dollars. However, since the price/chip is typically dropping (especially in DRAM and other commodity items), this implies that the actual number of chips produced is rising (I think I read somewhere that by 2000, General Motors will ship more computing capacity than IBM, owing to the large/increasing number of IC's going into cars). If the number of chips is increasing steadily, shouldn't the amount of consumables used in semi manufacturing be increasing steadily? Would not these companies make "no brainer" investments? They should make money just like Levi Strauss did in the Gold Rush -- not by finding gold, but by selling supplies to the miners.
A couple of firms which I believe fit into this category are ATMI and CRPB. Doubtless there are others; can someone comment on my reasoning and suggest other firms which fit into this category?
Thanks in advance.
Len |
