Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 223.37

-3.2%

3:59 PM EST

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To: Duker who wrote (30674)	5/27/1999 8:02:00 PM
From: gial	Read Replies (3) of 70976

While everyone is bracing for a turnaround in the semiequipment sector. I cannot help but noticing the old supply-demand force that has worked behind the rise and fall of these semi equip stock prices. Korean and Taiwanese chip makers are adding their capacity like crazy, each wants to gain market share at the expense of the others. While this is good for the equipment makers in the short term, they will lead to oversupply of the chips and the thus lower prices, which inevitably ushers in production and spending cuts. Ironically, the oversupply of chips is the result of the use of these advanced semi equipments which help the fabs churn out chips fast and efficient. The day the Taiwanese, Koreans and the Japanese chipmakers truly understand the law of supply and demand is the day we will see stable dram prices.

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