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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (18844)	1/31/2001 2:22:52 PM
From: Art Bechhoefer	Respond to of 60323

AMAT is to semiconductor producers what machine tool companies are to the automotive industry. A decline in machine tool orders does not necessarily result from a decline in auto sales. Instead, whether we're talking about semiconductors or automotive products, a decline in capital goods orders may mean nothing more than no immediate business expansion plans or new immediate need to adopt more forward looking technology. In other words, the semiconductor producing equipment currently in place or previously ordered may be sufficient for a few years, and further additions to the capital stock may not be necessary to support increased production of chips. We know from the data on the business spending component of the gross domestic product for the 4th quarter of 2000, issued earlier today, that spending was down drastically. One must assume that this drop will affect the bottom line at AMAT for at least a couple of quarters. On the other hand, we also know that consumer spending still had modest growth, and the overall growth of GDP was 1.4%. Undoubtedly these weaker economic results will translate into somewhat slower growth for companies such as SNDK, whose highest growth products are for consumer items. But the price of SNDK has already discounted slower economic growth, and probably over-discounted its impact. Art