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To: The Ox who wrote (13943)	9/28/2000 2:01:15 PM
From: The Ox	Read Replies (2) \| Respond to of 14427

Found at: Message 14468764 Given the increase in semiconductor demand and the current state of the market, Hutcheson revised his January 2000 semiconductor equipment forecast of 27 percent to a dramatic 87 percent growth for 2000. Rinnen similarly projects the strength of the cycle could cause investments in capital equipment to grow 60 to 70 percent for the year. Both agreed that capital equipment spending in 2001 would grow approximately 30 percent, and estimates for 2002 growth are 5 to 10 percent. Fuhs confirmed the strong potential of the cycle, stating that there was no evidence of oversupply for at least 18 months. The strength of the equipment industry is in large part due to the steady addition of capacity by logic chip manufacturers. Rinnen estimates that current investment is split nearly 50:50 between new fabs and existing plants. Fuhs mentioned that fab utilization rates in the U.S. have trended towards an unprecedented 95 percent, according to Federal Reserve Board data. Logic manufacturers and foundries drove capital spending in the first half of 2000, and spending for additional DRAM capacity is expected to follow. Expectations are that fab capacity will remain tight at least through 2002. All three analysts pointed out the strength in the current business cycle and its relationship to the booming electronics industry. Rinnen and Hutcheson agreed that the upside potential for investment in various device types provides evidence that this cycle is likely to carry on for another 18 months. Fuhs was quick to point out that the semiconductor industry has never experienced such strong growth in terms of number of devices shipped. Annual forecasts for capital equipment markets have been revised upwards to support the expected growth for 2000-2002. If the market stays on track with these analysts' projections, 2000 will be the biggest boom year on record for the semiconductor capital equipment industry.