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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (8885)	10/21/2000 11:02:31 PM
From: Ian@SI	Read Replies (2) \| Respond to of 10921

Zeev, I have a very difficult time taking the INTC fab construction labour shortage problem as anything else. To deliberately issue a false or misleading, material press release would put INTC at odds with several laws and with the SEC. The odds that any leading corporation would do this deliberately or even accidentally, IMO, are close to zero. It just isn't in their interest or any of their stakeholders' interests to commit such an act. Japan is now allowing its very sick financial institutions to do the honourable thing clearing that putrification from the system. Short term, it's hurt the Nikkei as moral hazard gets wrung out of the system once again. In the longer term, I suspect we'll see a much healthier base for that market's rally. Japan has been so weak for so long, I can't see it hurting the equipment sector. I can see it helping the equipment sector should it continue with its incipient program to bring its fabs up to current standards. And finally, I think that a book to bill above 1.1 to 1 for an extended period of time is inherently unhealthy. It just means that backlogs and leadtimes will increase to troublesome levels. After an extended period of underinvestment, a certain amount of catch up was necessary. We're now billing about $3B monthly. To support a $250B chip market, I could see a sustainable industry if billings increase to about $4B monthly. But expecting the BTB to remain at or above 1.24 and continue to grow is just not sustainable from current levels, IMO. We needed the large growth while Billings were under $1B monthly. We neither need that percentage growth, nor should we want it. IT would be quite unhealthy. In fact, a BTB at 1.1:1 would probably be unsustainable especially if equipment capacity keeps getting ramped up to keep lead times under 2 quarters in the front end. I don't know that that would necessarily be true. It depends upon how much faster growth in chip usage is than GDP growth. Even excess chip growth relative to the GDP can't go on forever or it becomes larger than the GDP. ;^) A nice thought, but it just doesn't happen in the real world. So, I'd like to see a BTB that comes down closer to 1, say about 1.06 with Billings doubling about every 3 years rather than each year or less. IMHO, Ian.