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

To: Sun Tzu who wrote (37084)	8/30/2000 2:29:59 PM
From: w0z	Read Replies (2) \| Respond to of 70976

Yet the same semicap companies claim to have much higher production capacity. It probably depends on what they mean by their claim...floor space is probably not a problem, skilled people is a problem and I'm sure everyone is struggling with scarcity of specific parts. You can build a $1M piece of equipment but it might be sitting in the aisles waiting for a $5 chip in critical supply. Agilent reported in mid-July that they would miss earnings by about 50% but then they came very close to original expectations when they reported in mid-August. They said they had essentially finished products stacked in conference rooms waiting for a few critical RF chips. When the chips unexpectedly came in, they were able to quickly install them and ship the products. I'm sure this is the case everywhere and would be very surprised if the semi-equipment manufactuers were immune to critical parts shortages. So yes, their capacity might not be a problem...but parts shortages may prevent them from effectively using or increasing the capacity they have.

To: Sun Tzu who wrote (37084)	8/30/2000 2:39:28 PM
From: Math Junkie	Read Replies (1) \| Respond to of 70976

Sun, semiconductor capital equipment is very complex and it takes time to acquire all the parts and build the units. One could argue that they could start building sooner, but there are customer-selected options which must be specified, and I also suspect there are limits to how far one can reasonably go in anticipating product mix. My understanding is that there is an optimum lead time from the point of view of manufacturing efficiency, which, of course, affects profitability. I think the issues Bill Tippett raised are also a factor.