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

To: Jacob Snyder who wrote (40497)	12/6/2000 6:17:48 PM
From: Mephisto	Respond to of 70976

My opinion is that chip demand is now much larger than just PC demand, and is now in so many different products, that cycles in chip demand will fairly closely follow overall economic demand. More web-connected handsets than PCs by 2002 At the annual analyst meeting yesterday, "Nokia stated that it believes there will be more web-connected handsets than PC's in the world as early as 2002, versus its earlier projection of 2003". ******************************************************* Jacob, I heard on tv last night that after 10 years the recession in Japan is over. Lately, I've seen quite a bit of tv footage of kids and adults who were fascinated by their various electronic gadgets! - Mephisto

To: Jacob Snyder who wrote (40497)	12/7/2000 1:14:29 AM
From: Wes	Read Replies (1) \| Respond to of 70976

Jacob, Your comments regarding "technological" equipment purchases vs. "capacity" purchases are definitely true. However, "capacity" purchases are still a much greater portion of revenue in the industry than the former. Also, I'm not quite sure how "critical" some technological purchases are. You may be right that chipmakers cannot affort to let the technological purchases slip, but on the other hand, chipmakers seem to be very resourceful and get by with what they have in down markets. As for tying chip industry to the macro-economy, I think that the two are very closely tied. I definitely agree that PCs are no longer the only driving force, and in fact we have a whole variety of applications driving the industry now (like your kids' toys among others). But I do think that the demand for those "other" products/applications are themselves closely tied with the economy. And certainly in a slowdown of the overall economy, there will invariably be less demand for cell phones, playstations, palm pilots, etc. in addition to less demand for PCs. Now as for the chances of a recession, I really have NO idea. I didn't mean to give the impression that I thought a recession was probably on its way. The point I do want to stress is that even in a "slowdown" or "soft landing", because of the way the equipment industry scales with the chip industry and overall economy, semi-equipment orders will suffer disproportionately. I am of course encouraged by: 1) Greenspan's comments the other day: it seems that we're "over the hump" in terms of interest rates; and 2) the sharp drop in oil prices in recent days (hope it stays). These two factors mean that we only have the slowing economy to worry about as opposed to worrying about BOTH a slowing economy AND inflation pressures. This in turn translates into the fact that we may be closer to completing the economic cycle than we may have thought a few weeks ago (even if it does means going into a recession for short while). In the meantime, I do want to stress that I think AMAT is one of the greatest companies in the world. We are almost certainly not at the bottom in stock price yet, but we will be getting the best chance in years to pick up shares for cheap, so as I say to all: keep some powder dry and get ready!