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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Demosthenes who wrote (36677)	8/12/2000 1:01:47 AM
From: Ian@SI	Read Replies (3) \| Respond to of 70976

1)Do you still intend to do so? Yes, and I don't plan to get out of my positions within the next year or so. 2)Do you think the cycle will moderate? (I think you have said so recently.) And if so, can you balance your argument effectively against the historical precedent of greed/mkt/share over-spending that usually takes us over the cliff. It already has. e.g. - No capacity builds by DRAM makers except Samsung. Others have reached the end of the line by doing shrinks. Next phase of the upleg will be fueled by the DRAM makers equipping shells, expanding existing fabs or greenfield developments. Many chipmakers have farmed out excess capacity requirements to foundries. State of the art Fabs are becoming much more expensive - you just can't get a good leading edge fab for a Billion dollars anymore. And they will continue to increase in price as time goes on. There will be an increasing number of fabless semiconductor companies with fewer foundries managing the boom/bust across various sectors. Clearly, if there's a global economic collapse, chip companies are going to suffer just as pretty well every other company will. There's been several years of underinvestment. We have a chip shortage; and we still don't have enough investment to cause capacity to catch up with demand. i.e. Investment should be closer to 25% of sales to make up for the prior years. This just isn't happening across the sector. And the one anomaly of TSMC just isn't going to make a dent. So essentially, there will be fewer, larger fabs processing a more diverse workload (i.e. - the foundry model) with peaks in one chip sector balancing the troughs in another to some degree. The semiconductor business is "coming of age" and can look forward to many years of healthy growth - well above the growth in GDP. Just a few random thoughts late on a Friday night, Ian.