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

To: Gottfried who wrote (42485)	2/22/2001 12:55:39 AM
From: Ian Davidson	Respond to of 70976

From the WSJ: February 22, 2001 Chip-Making Equipment Orders Slide In January, but Decline May Not Last By MOLLY WILLIAMS Staff Reporter of THE WALL STREET JOURNAL The bad news that has plagued chip makers is catching up to the companies that supply manufacturing equipment. But it might not last long. Orders for new chip-making gear fell sharply in January to $1.9 billion, off 21% from orders posted in December and 15% below January 2000's level, Semiconductor Equipment and Materials International reported this week. The trade group said the drop was steeper than expected, suggesting that chip makers were reacting more quickly than in past years to curtail spending as demand slowed for their products. Applied Materials Posts 71% Jump in Net Income, Lowers Guidance (Feb. 14) Sharp spending cycles are nothing new to the semiconductor industry. But the cycles seem to be getting shorter than ever. Brett Hodess, an analyst at Merrill Lynch, noted that the order decline in January was the worst in 10 years for that month. "In this cycle, the decline in orders is much faster and steeper than previous cycles," he said in a report. The good news, other analysts said, is that chip makers also are in a better position to react quickly to a rebound in demand. "The chip makers have slammed the brakes on," said Sue Billat, an analyst at Robertson Stephens Co. "But we could rebound more quickly than in past cycles." Applied Materials Inc. illustrates the shifting forces. The Santa Clara, Calif., company, the largest maker of chip production gear, said in late January that a number of its customers had delayed or canceled orders, causing it to miss its revenue and earnings targets for the fiscal first quarter. Last week, the company also said it expects sales in its fiscal second quarter to decline, and announced plans to cut salaries and scale back its use of temporary workers to cut costs. But the company slightly exceeded its lowered forecast for the first period ended Jan. 31, and said it is optimistic that new technologies will help it weather the downturn. Shares of Applied Materials and some other chip makers were up sharply in early trading Wednesday before giving back some of their gains. Applied's shares were up 69 cents to $46.63, and Novellus Inc.'s were up 63 cents to $41.25. Lam Research Corp. shares were down 69 cents to $23.63. Last year, SEMI says, total sales of chip-making gear surged 83% to $46.7 billion, as chip makers scrambled to add manufacturing capacity to keep up with strong demand in the first half of the year. That demand subsequently cooled, and equipment sales are expected to grow just 22% this year. But many chip makers feel they can't stop spending on new technologies, including a shift to 12-inch semiconductor wafers to boost production efficiency and a new interconnection technology based on copper circuitry. Chip maker Intel Corp. in January said it was increasing its capital-spending budget to $7.5 billion this year from $6.7 billion last year. Some analysts believe the company may have to scale back its plans later this year if economic conditions worsen. But Intel and others also don't want to get caught short as they did early last year when demand outstripped supply. And the new technologies they are investing in are crucial to getting faster, cheaper chips into all kinds of devices. If things pick up for chip makers in the second half, as analysts predict, equipment suppliers could start to see their orders pick up by late summer or sooner. The downturn "is not going to last all that long," Ms. Billat said. Write to Molly Williams at molly.williams@wsj.com

To: Gottfried who wrote (42485)	2/22/2001 8:46:07 AM
From: michael97123	Read Replies (2) \| Respond to of 70976

"Now this 'smart' money seems to be jumping the gun. Maybe they think in 1 to 2 years they'll have at least a double and that's good enough." Gottfried, That is a better point than you imagine. The expectations of investors going forward have been modified reflecting the carnage we have seen. We do know that there will be better days ahead. We just don't know when. We know tech will continue to advance. We just don't know when the new investments will come. But we do know that chip companies will have to gear up in advance of a rebound and we also know where the equipment comes from. And we know which are the best companies. Predictibility is a beatiful thing. Mike

To: Gottfried who wrote (42485)	2/22/2001 9:13:26 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

G, In addition there is no innuendo at all that Applied uses funny accounting, depends on equity investment gains, extends loans to weak clients etc. You cannot say that about some of the other gorillas. I have heard the exact same argument used against INTC, MSFT, and CSCO. Personally, I believe it(thg false argument) is done by people looking for ways to justify their sitting on the sidelines while several hundred percentage points of gains vaporized before them. Brian