AMD's conference call did not give me warm fuzzies about semi stocks. Demand is weak in Asia as we are all aware, and all semi and semi-equip longs need this to change before we can see massive stock appreciation. On the bright side, AMD said they are spending $1.2B(about half of sales) on cap. ex. this year and a good portion should go to photolithography. All the major semi companies are going to 0.18 in '99, but on what scale has yet to be determined because of the oversupply problem. In MPUs, all the companies will try to get to 0.18 for competitive reasons(clock speed and die size). In DRAM, the biggies want to start making 256Mb parts to hopefully charge a premium(64Mb is not very profitable). In ASICs, we've seen the announcements regarding 0.18(almost all of them). SOCs will require 0.18 to be competitive.
But after all this, we still need Asian demand to pick up and this looks like it might take awhile, because supply still far exceeds demand.
Effect on Cymer tomorrow, I have no clue. Would anyone care to offer a pro or con argument as to whether Cymer's position in its market will be strengthened or weakened in this environment? I believe they are the low risk choice and thus preferable. On the other hand, if low volumes of tools are shipping, low volume manufacturers may become feasible suppliers. Cymer is still the gorilla in its niche, but this environment continues to STINK.
I will continue to hold my shares for several years, but this has been painful. I could have made a killing going long internet stocks. ;-(
Bob |
