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Politics : Formerly About Applied Materials

AMAT 235.13

+2.2%

3:59 PM EST

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To: Jack Kunkle who wrote (30698)	5/28/1999 9:53:00 AM
From: Katherine Derbyshire	Read Replies (2) of 70976

Average selling prices do NOT normally fall. (I've posted the data before, but don't have time to do so again now. My source is ICE, ice-corp.com, if anyone wants to track it down.) The price per transistor drops by about 30% per year (Moore's Law), but the average selling price of the chips goes up. These two statements are not contradictory: if a new chip has 4x the transistors but costs 2x as much as its predecessor, then the ASP has gone up while the cost per transistor dropped. According to Bill McClean, president of IC Insights, the correlation between ASPs and capex is "the kind of correlation analysts dream about." It's very obvious and very strong. Katherine

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