E, about semi-equipment, it's about in my " tech third tier" WRT knowledge I have about them, and comfort with buying their stocks or talking about them. That might not be very high on the knowledge scale, but has that stopped me before? ;-)So, with that, what can I say with any confidence?:
1. I don't think there will be much, if any "correction or discount" in price of the big semi equipment pieces. This is because they are very big and complex, with lots of different kinds of technology in them, and not a whole lot of them of one kind are made. They are also very labor intensive in design and manufacturing (can't expect us Si Valleyers to work cheap, you know), and have hundreds, maybe thousands of parts per machine, again from many different technologies. So, no economy of scale like an Intel or GM get, either from the bill of materials (parts)/manufacturing side, or the sales side.
2. Maybe you're right about consolidation being a likely thing, as many of these companies are suffering and maybe there needs to be a few cases of pairs pushed together. Funny, though, I personally have heard NO rumors about mergers or anything else in the semi equip area.
One thing about Applied Materials, though, they seem to be very resilient in terms of stock strength. Their fundamentals, at least in terms of earnings for the next few quarters, and outlook, are at least as bad than LSI's. But AMAT has great identity, like Intel, Cisco and Dell, and gets a lot of buying when anything at all looks positive. Also it's a textbook case of bigger cap/smaller cap and sector leader/sector middle guy. We keep hearing that the low-mid caps will start moving, but when?
Fabs are really getting expensive to build, like you say. Motorola is calling one off, or delaying it, on the East Coast, I heard $3 billion. $2B had been the number I'd heard most lately.
Fabless chip houses are still a pretty recent thing. Used to be if you designed'em, you built'em. Interesting to see how many "full service" chip companies there might be down the road, like LSI.
Don't know if that does any good at all.
Ciao,
Tony |
