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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (8238)	2/16/2000 2:59:00 PM
From: Gottfried	Read Replies (1) \| Respond to of 10921

Kirk and all, a new chart showing the ratio of SEMI equipment orders vs reported SIA semiconductor shipments. SIA shipments and SEMI orders track. geocities.com While SIA shipments increased about 50% from the bottom to Dec '99, SEMI orders tripled. geocities.com In other words: in good times about 15% of semiconductor revenues are spent on equipment, in bad times as little as 5%. [I'm aware that SEMI is not the entire universe of equipment vendors. Not sure about SIA] Gottfried

To: Kirk © who wrote (8238)	2/16/2000 3:48:00 PM
From: Running Bull	Read Replies (1) \| Respond to of 10921

I am in the chip side of the business now and there is definitely a capacity crunch in the making. Many of the chip makers have off loaded their capacity to the foundries resulting in huge increases in chip volume forecasts for the likes of TSMC, UMC and others. TSMC for instance asked their customers for forecasts late last year and the forecasts came back at way past capacity for the fab I am working with. Remember that these foundries have many fabs all in different wafer sizes and geometries. So the fab has to evaluate whether everyone's forecast is optimistic..(if you are a chip guy using a fab the last thing you want is to get thrown out so you ask for the biggest piece of capacity you dare i.e. forecast high) or if the forecasts are accurate. Based on that they have to make capacity addition decisions. Since it seems that much of the market has shifted to the independent foundry model, I think it must be very difficult for the fabs to accurately know what the real demand will be. If you go further down the line, the chip makers don't really have a clue either since there are always competitive threats that can eliminate a key customer, cause prices to drop in half or end products that don't pan out to meet the potential forecasts by the guys at that level in the chain. Anyway, the poor equipment manufacturers are at the end of this huge pendulum and get whipsawed back and forth. There are many tiers of supply, demand, forecasts fear and greed that all get amplified and our favorite equipment stocks are at their mercy.