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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 (139)	5/29/2000 9:51:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 276

Ian, I think that it "looks" like the chip equipment business is growing faster than the auto industry, but I believe it is so only because the throughs are so deep. Look at the the growth of SI real estate over the last 20 years, it doubles every ten years, in 1982 it was 1 B sq-in, in 1992 about 2 B sq-in and is on its way to 4 B Sq-in in 2002. That is an average growth rate of 7.2% less than the last 20% growth rate of 8.9 for the automotive industry. Of course, more equipment is used on each piece of SI RE, but on the other hand, more real estate is treated in a single step (the transition form 200 mm to 300 mm doubles the RE treated per step from about 50 sq in to 112 sq-in). When the semi-equip get going, they do grow at 30% per year, and then they go into negative growth, some time for two years running. As a matter of fact, only now in 2000, we are matching (and will exceed) the prior peak of 1995. The cyclicality of the semi equip is much worse than that of the automotive industry. As they say, when the chip industry catches a cold, the semi equip catch pneumonia. (g). That is also why they are so much fun to play with. Just make sure you take your chips off the table when valuations get "whacky". Zeev