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

To: Jim Oravetz who wrote (8399)	6/7/2000 1:18:00 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 10921

The evidence is building fast that a severe shortage of chip production capacity is going to hit the industry in another couple of months. Reason No. 1: The latest industry data shows that 8-inch wafer fabs already were running at an astonishing 99% of global capacity at the end of the first quarter. Reason No. 2: Wafer starts for 0.3-micron and below processes hit 566,200 six-inch equivalent wafers in the first quarter, a whopping 22.3% increase over the preceding quarter. That means that capacity for these advanced chips jumped 100,000 wafers a week in the first quarter over the fourth, which ran 100,000 wafers a week higher than the third quarter. "These two numbers really jumped out at me," says Bill McClean, IC Insights president. This fast ramp was made possible by empty fabs and available production space put in place during the last downturn, he says. But now the industry has "pretty much filled out all of the existing space, and there's not a lot of room left [for rapid expansion]," the veteran analyst warns. So he and other analysts now expect average selling prices to begin to rise in the third quarter as shortages of ICs spread. By the end of the year, McClean expects to see 2000's ASPs up 7%-to-8% over last year. He called the second quarter the "lull before the storm." Semi. Business News Jim