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

To: Pink Minion who wrote (38284)	10/15/2000 8:37:23 PM
From: Kirk ©	Read Replies (1) \| Respond to of 70976

The sun will always rise from the east unless you change the rotation of the earth. No, you could remove the Sun.... Thinking outside the box and acting like a wise@$$... again... Kirk out 8)

To: Pink Minion who wrote (38284)	10/16/2000 6:24:42 PM
From: Jacob Snyder	Respond to of 70976

re:History will repeat itself unless you change the variables. Exactly. The hard part, of course, is deciding which are the important variables, and what is noise. The semi-equips will be cyclical, in proportion to: 1. the time between a semi company breaking ground on a new fab, and that fab reaching full capacity. Shorten that time, and the semi-equips get less cyclical. 2. the ratio of up-front capital costs to running costs. As long as so much of a semi's costs must be spent before they make sales (fixed costs), there will be a self-defeating tendency to maximise production till the point of over-capacity, and not decrease production until prices for chips get down to the marginal cost of production (which is very low). You can imagine contracts where semi companies don't build the fabs until they have years-long contracts to sell the chips. That would mean shifting the risk (of guessing wrong about future demand) from Intel to Compaq, from Motorola to Nokia. I don't see that happening. Those are the important variables, I think.