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

To: Gottfried who wrote (37080)	8/30/2000 2:18:49 PM
From: Sun Tzu	Read Replies (2) \| Respond to of 70976

Recently I've started contacting various semicap companies to ask them about their production capacity. My theory was that if in fact there is shortage all over the industry, the ones who can increase the production capacity the most will be those who will earn the most over the next two quarters. So far I have received several answers and it seems that on average there is a lead time of around 4.5 months. Under the best conditions, the lead times drop to under a month [not the case now] and for some products the lead time is as high as 6 months now. Yet the same semicap companies claim to have much higher production capacity. The combination of shortage, high lead time, and high capacity to produce does not make a lot of sense to my uneducated mind. Let's take AMAT as an example. In the CC they stated to have $15B production capacity. That is about $4B/Q. Yet revenue numbers for the quarter were $2.7B. Other companies have reported even greater differences between their capacity and sales figures. Why would you not be maxed out of capacity if indeed there is a shortage for your products? And would there be lead times as long as 6 months, if you have the ability to produce them more goods? Desparately needing education, Sun Tzu