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To: hhieslmair who wrote (1050)	8/3/2000 12:53:41 PM
From: olduvai5	Read Replies (1) \| Respond to of 1184

It's actually more complicated than simply tracking chip test complexity and/or chip supply. Keep in mind that, as chips become more complex and faster, there is a demand component that addresses the need for better testers. Also, as chip output increases, there is a volume driven component. All tester manuf have products that increase the volume efficiency need at the lower cost end, and address the complexity issue at higher cost end. Total unit demand actually could decrease if tester efficiency (test more devices at once) increases faster than production in the low cost market segment. High cost tester demand (test superfast chips of highly complex design) has a relatively inflexible demand because increases in test capability usually come at the expense of efficiency. There are designs on many drawing boards for which no test solution is currently available at rated speed. This is especially a problem with ADSL, SONET etc where data rates are going to the terabit level, but testability is stuck at the low gigabit level. The net result is that quantum leaps in product performance usually cause a burst in tester orders at the high end where margins are good. Cost constraints for low ASP chips will drive an increase in efficiency, lowering the number of testers required. This is easily visible in the see-saw swings in tester shipment rates over the last few years. At the end of the day, despite the gloomy analysts, the party is far from over - just think of it as somebody just refilled the punch bowl!

To: hhieslmair who wrote (1050)	8/9/2000 5:36:58 PM
From: Maverick	Respond to of 1184

AMAT beats EPS by 2 cents,order at 3.28B,sees strong demand in 00 & 01 One development that could lure a few more investors back to the chip sector is Applied Materials' (AMAT 72 1/8 +1 9/16) earnings... After Wednesday's close, AMAT reported gain of $0.70 v. consensus estimate of $0.68 and year-ago gain of $0.31... Revenues of $2.73 bln exceeded upper end of company guidance ($2.6-$2.7) and represented a yoy gain of 83%... More impressively, sales rose by 25% sequentially... Market will also be happy with the $3.28 bln in new orders (above $3 bln AMAT projected) and the 2.9% jump in gross margins to 50.9%... Barring cautionary guidance in the conference call (see Short Stories page for updates from the call), AMAT should lift the entire chip/chip equipment group in today's trading. Applied Materials (AMAT) 72 1/8 +1 9/16: -- Update -- Reports Q3 earnings of $0.70 a share, $0.02 better than the First Call consensus of $0.68, vs year-ago earnings of $0.31; revenues of $2.73 bln represent an 83% increase Applied Materials (AMAT) 72 1/8 +1 9/16: -- Update -- Gross margins of 50.9% were up from 48% in the year-ago period. New orders came in at $3.28 bln. Applied Materials (AMAT) 72 1/8 +1 9/16: -- Update -- New orders of $3.28 bln were roughly in line with expectations... regional distribution of new orders was as follows: North America 30%, Japan 24%, Taiwan 15%, Europe 15%, Southeast Asia and China 9%, and Korea 7%... AMAT is up 7/8 at 73 in after hours Applied Materials (AMAT) 72 1/8 +1 9/16: -- Update -- Company's Sr. V.P., David Wang, says he has never seen such high growth rates across such a wide range of device segments; believes current industry up cycle will continue and is seeing the need for additional capacity expansion across all integrated circuit segments; sees shortage of DRAM developing and looks for increased cap spending in this area in future. Applied Materials (AMAT) 72 1/8 +1 9/16: -- Update -- Wang says next year will be very strong in bookings and revenues across all AMAT product lines and regions; also reiterated again the view that the industry up cycle is expected to continue. Applied Materials (AMAT) 72 1/8 +1 9/16: -- Update -- Company CFO, Joe Bronson, provides following Q4 guidance: orders to be up sequentially and likely to exceed $3.5B; revenues to be $2.85B-$2.90B without any contribution from 300mm product; gross margins expected to exceed Q3 level of 50.9%; and EPS should be $0.73-$0.75; current Firtst Call consensus is $0.75 with high estimate of $0.87 and low estimate of $0.69... AMAT trading up more than a point in after hours. By Briefing.com