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

To: Katherine Derbyshire who wrote (31614)	7/26/1999 12:02:00 PM
From: Tony Viola	Read Replies (1) \| Respond to of 70976

K, No, but the people paying for the equipment care a lot. 1997 and 1998 demonstrated that the money to build those $2 billion fabs has to come from somewhere. Intel should set new records for sales and earnings in Q3 and Q4. How about them? As far as DRAM goes, whenever the going gets tough, don't the countries that the majors of that business reside in jump in to help (Japan, S. Korea)? Tony

To: Katherine Derbyshire who wrote (31614)	7/26/1999 12:40:00 PM
From: Doug B.	Read Replies (1) \| Respond to of 70976

1996 was one of the worst years on record for DRAM vendors, and therefore for their equipment suppliers. Yet, in 1996, DRAM bit volume soared. Volume of chips does not correlate to equipment purchases. Future increases in bit volume will come not only from increased output in current production lines, but from the increases from 64Mb to 256Mb and beyond. These changes require new equipment. No, but the people paying for the equipment care a lot. 1997 and 1998 demonstrated that the money to build those $2 billion fabs has to come from somewhere. To stay competitive, new fabs are going to have to be built, or old ones will need retooling. It seems that the pressures from 300mm, copper, and feature shrinks are building to the point where this is increasingly true, and discretion in these purchases will become more and more inelastic. Also, the PC is not dead, but I think other types of devices are becoming a larger segment of the chip market. Foundries are booked solid, so there is room for growth in fabs. Of course, the industry will overshoot this demand and set up the next bust cycle... :) Just my .02 Doug

To: Katherine Derbyshire who wrote (31614)	7/26/1999 1:00:00 PM
From: Jerome	Read Replies (1) \| Respond to of 70976

K.D. "This horse just won't stay dead" I believe that your historical data is very accurate. But history never repeats itself in the exact same way. If DRAM prices continue to fall would not the manufactures say something like, "if we upgrade our facilities we may still lose X millions of dollars, but if we don't upgrade we will lose 10 x X millions of dollars"? This is where I feel that foreign companies, in Korea, Japan, Taiwan and Europe have an advantage. Their governments will figure out some way to subsidize these businesses until profitability returns. (if it ever does). American firms only get tax credits from local communities to keep the jobs in the area. Time will tell. Jerome