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Politics : Formerly About Applied Materials

AMAT 317.45

-3.4%

3:32 PM EST

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To: Ramsey Su who wrote (23399)	8/27/1998 9:07:00 AM
From: Katherine Derbyshire	Read Replies (1) of 70976

>>Is there a chance that the semi eq companies will have their version of over capacity? By that I mean when some customer finally decides to ramp up, everyone will be so desparate that they will undercut each other just to get their foot in the door?<< Hard to say, since that would be a company-by-company management decision. Supplier companies, especially more commodity-like ones (photomasks, fab consumables, equipment components) have been feeling a lot of pricing pressure for some time now, and that certainly won't get any better until the market improves enough for them to have more leverage. But pricing pressure is different from what you're talking about. What you might see is serious price-based competition from the Japanese companies. The currency devaluation helps them everywhere, but will especially help them in Japan and Korea--selling to chipmakers from weak currency countries. (And in Japan, of course, there's likely to be cultural pressure to buy Japanese.) Katherine

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