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: Grandk who wrote (32730)	10/4/1999 11:18:00 PM
From: Ian@SI	Read Replies (2) \| Respond to of 70976

The other option is it's just an error. Excellent interview of Morgan by Gharib on NBR... ++++++++++++ 0/04/99: One On One With James Morgan, CEO, Applied Materials SUSIE GHARIB: Applied Materials is having a strong year and that's thanks to the economic turnaround in Asia. It's the largest manufacturer of equipment to make semiconductors. Today I talked with AMAT's chairman from Hong Kong where he's been visiting Asian customers. I asked him if semiconductor companies in Taiwan are cutting back orders after the earthquake there. JAMES MORGAN, CHMN. & CEO, APPLIED MATERIALS: There's a shortage of new technology, capacity, all over the world for virtually every type of semiconductor. So we believe this only kind of tightens it a little bit more and means that there will be a substantial amount of investment required over the next few years. GHARIB: Mr. Morgan, 1999 has been a turnaround year for Applied Materials and you've had strong revenue growth. As you look to 2000, what is the outlook for your orders and your growth? MORGAN: Well, we're right in our planning cycle right now, because our year starts next month and we're about to close on our plan. And we see business being up. We haven't quite set the total amount as we do a final assessment of the economies and the demands of our customers. But clearly there's a lot of identified business. So we believe business will be higher in 2000 than it was in 1999. GHARIB: I wonder, are you going to quantify it in any way, because a lot of analysts are saying that the industry is expected to grow in revenue by about 20 percent in 2000. Are you going to grow faster than that? MORGAN: We believe, yes, we'll grow faster than that in 2000 over 1999. GHARIB: As the chip industry moves more to smaller chips and larger silicon wafers, it's obviously going to mean that they're going to have a requirement for new semiconductor equipment which is good for Applied Materials. Can you quantify in any way the impact of that kind of growth on your business? MORGAN: We think in the early part of the next decade, we'll be able to grow $10 to $12 billion, up from our $4 billion last year. So we have plenty of opportunities ahead. GHARIB: During the recent slowdown in the semiconductor business, Applied did a lot of cost cutting, a lot of streamlining. Now that you've got all this business coming, do you think that you're going to have to ramp up or can you grow within your current cost structure? MORGAN: Well, of course as we continue to grow, we'll continue to expand our cost structure, but we have the ability to substantially grow with the base. We've shortened our cycle times and really we changed many of our best known, what we call BKMs or best known methods around the world so that we're clearly a much more effective company than we were going into the downturn. And that's shown both by our gain in market share as we come into the upturn and also the performance in assets and things like that. The team's done a great job. GHARIB: And it's also shown up in your stock price. A year ago at this time your stock was in the 20's. Now you're up close to $80 a share. But yet the valuation of Applied Materials stock is really not at a premium compared to your peers. And since you're the industry leader, what do you think it's going to take to get valuation of your stock higher? MORGAN: Well, I think a better appreciation by the investors of the long-term growth potential. I mean clearly since we make every chip everywhere every day, the information age and the Internet are going to take us with them. I mean companies like AOL (AOL) and Microsoft (MSFT) and Cisco (CSCO) and all these new start-ups, every one of them is sort of one way or another working for Applied Materials. So we think as the investors begin to realize that, that we'll begin to see an increased valuation. GHARIB: Thank you very much Mr. Morgan. We appreciate you talking to us from Hong Kong. MORGAN: Thank you. It's nice to talk with you.