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

To: advocatedevil who wrote (42308)	2/17/2001 4:17:36 AM
From: advocatedevil	Read Replies (1) \| Respond to of 70976

Recent AMAT references: ========= Wall Street Week TV Show Dennis McKechnie, manager of the Pimco Innovation Fund... Semiconductor makers such as Micron Technology Inc. and chip-equipment makers like Applied Materials Inc. are also attractive, said McKechnie. Those two companies are among his top 10 largest holdings. quote.bloomberg.com ========= Silicon Valley Stocks Rise This Week, Led by Semiconductors ``Semiconductor companies are going through a tough period right now, but it will be a short time before we start seeing improvement,'' said Eric Ross, an analyst with Thomas Weisel Partners, who upgraded Applied Materials to ``buy'' from ``market perform'' on Tuesday. Other analysts are less optimistic about an imminent turnaround for the semiconductor sector. Susan Crossley at Wells Fargo Van Kasper downgraded KLA-Tencor to ``sell'' from ``hold'' and reiterated a ``sell'' rating for Applied Materials. quote.bloomberg.com ========= Chip Equipment : Hearing from sources at Banc of America Sec. that Samsung has decided to delay its new logic fabrication facility by 6 months; viewed as a negative for semiconductor equipment suppliers AMAT, KLAC, NVLS, LRCX, MTSN, ASML. Message 15365591 ========= AdvocateDevil

To: advocatedevil who wrote (42308)	2/17/2001 10:48:59 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

I believe it will be difficult for these folks to justify the expense today, when demand is slowing and capacity is rising. 300mm Captial equipment purchases are made not based on current demand, but that of 2-3 years down the line, since setting up a greenfield facility will take at least this amount of time. Anyone betting against AMAT because there is little demand NOW is not looking in the right direction. As far as yields not justifying the purchase of 300mm et al, should the chipmakers wait until their neighbor gets their 300mm up and running and has improved their yields before jumping into the fray? They would be like cutting their own throats, since catching up would be very hard to do. Yields are always poorer on a new generation of tools; the chipmakers know this going in, but they also know that over time their costs will be dramatically reduced by making the conversion. BK Subject 50522

To: advocatedevil who wrote (42308)	2/17/2001 8:34:45 PM
From: FJB	Read Replies (2) \| Respond to of 70976

What about the second and third tier semis? It costs plenty to purchase and maintain new equipment. It takes longer to implement new technologies and then get a return on the investment. The reason why Applied and some of its competitors have increased margins in recent years is because they not only sell equipment these days, but also process know-how. There was a very interesting chart presented by Sue Billat, or Applied maybe. The percentage of sales spent on R&D for semiconductor companies has gone down over the last ten years, while it has increased dramatically for equipment companies. If you take a look at R&D spending by Taiwanese foundries, it is rather low compared to IDMs, but they are keeping up with most IDMs in device performance. The same goes for second and third tier manufacturers. They have very little process knowledge. They basically buy process knowledge from the equipment guys along with the hardware. However, this may be a more severe downturn than the current stock prices indicate, or it may not. Considering the state of IT spending at end users, it is hard to argue against your position. OTOH, it is almost certain it will be nothing like '98. Place your bets.