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Technology Stocks : Semi Equipment-Sell when they're singing in the streets -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (123)	5/27/2000 9:37:00 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 276

Ian, I am not a pessimist by any mean, I have stated that some time in the near future we are going to go back into a major bull move till at least the elections. What I said is that the peak in prices for the semi equip (not the chips themselves) for this cycle has been reached IMHO. I expect the rally to get to these earlier peaks or just under these) in this coming rally, higher for the big diversified one, lower for the smaller specialized one. Let me ask you how high do you think AMAT will go in this cycle and what will its forward looking PE be at the top of the cycle? Zeev

To: Ian@SI who wrote (123)	5/28/2000 11:10:00 PM
From: Q.	Read Replies (2) \| Respond to of 276

Any thoughts on capital investment as a % of revenue for the semiconductor makers, and how long it can be sustained? The downturn in 1997-98 was in good part the result of the sudden cessation of an unsustainable level of investment by Asian DRAM makers. Debt capital was paying for the expansion. The DRAM makers were racking up so much debt that this couldn't last forever. Ultimately, macroeconomic factors shut off the sources of debt financing, and semi-equip orders went south fast. The present boom is being led by a similarly unsustainable level of investment by foundries. Intel can be trusted to invest at a sensible rate of ~10% of revenues, but it seems that overseas semiconductor makers are different. They are inclined to invest 100% or more of revenues when times seem good, and that's a level that can't last forever. Is there a reason to believe that the capital that is paying for the present expansion will continue to be renewed for several years?