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Technology Stocks : Kulicke and Soffa
KLIC 46.75+0.6%Dec 26 9:30 AM EST
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To: Gottfried who wrote (3082)9/16/1998 9:21:00 PM
From: Smilodon  Read Replies (1) of 5482
 
Not a stupid question.

<Why would the makers
of back end equipment be the first to get orders from a customer
who is planning a new fab?>

I don't think they are necessarily first when you build a new fab. But, a lot of production increases are adding production lines to an existing fab, or more importantly, shrinks of existing products. This means using smaller line widths and thus getting more chips on a wafer. So, while you process the same number of wafers, you get a lot more chips. Thus more chips to package and test.

Also, a shrink does not require all new front-end machines. Much of the old tools can be used in the new process. You only need to buy some (35-60%) new machines for the process.

Thus the back end is a little more tied to chip demand versus wafers. But, the back end is less tied to technology increases.

Hope that helps. Hopefully an someone with actual industry experience will add more to this discussion.

Regards,

Archer
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