Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: FJB who wrote (31576)	7/22/1999 9:12:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Are we in for another rollercoaster ride? ************************************* Another dip in fab spending could hit in 2000, warns analyst A service of Semiconductor Business News, CMP Media Inc. Story posted 6:30 p.m. EST/3:30 p.m., PST, 7/22/99 NEW TRIPOLI, Pa.--While optimism for a strong recovery continues to grow among suppliers of chip production equipment, one analyst has begun to warn that semiconductor capital spending may peak in the first quarter of 2000, hit a low point at the end of next year and then begin another recovery in 2001. This roller coaster ride is possible in the next couple of years for a variety of reasons, including weakness in DRAMs, another delay in 300-mm fabs, and weakness in the global economy, said Robert N. Castellano, president of The Information Network, a research firm based in New Tripoli. "We predicted the end to the previous equipment recession in our BusinessWire press release of July 27, 1998, with a 1999 growth of 10.4%," Castellano said. The analyst added that other market researchers, surveys and studies have caught up with his company's forecast--that "1999 will not be flat after all." But Castellano also cautioned that the euphoria may be short lived and equipment bookings could drop off in the second quarter of 2000. The slump might continue through the year before increasing in early 2001, he added. Castellano said factors behind this scenario include: Continued erosion in DRAM prices and oversupply of memories, which will undermine profits and capital expenditures; Delays in demand for 300-mm wafers because the newest draft of the technology roadmap from the Semiconductor Industry Association (SIA) is now predicting no die-size increase (see July 13 story); Continued price concessions among equipment manufacturers; Modest PC sales, which will impact microprocessor and DRAM manufacturers, reducing the need for new wafer fabs and signaling reduced fab construction (coupled with huge losses by memory manufacturers in Korea and Japan in 1998 and Advanced Micro Devices Inc.; Poor yields with copper tools, which may signal a wait-and-see attitude among potential users until equipment companies can offer an integrated turnkey operation; Interest rate hikes in the U.S., Japan, and Germany; Political uncertainty in Taiwan, which can abruptly affect foundry operations; and, Economic uncertainty in Argentina that could destabilize global currencies the way Thailand's Bhat impacted currencies starting in July 1997. --J. Robert Lineback 204.247.196.14