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

To: Proud_Infidel who wrote (9677)	4/12/2001 5:05:04 PM
From: WTSherman	Read Replies (1) \| Respond to of 10921

Contrary to the BS that alot of pro business economists are spouting, this is a demand driven slowdown/recession. What's happening in the semi-equip area is a triple whammy, consisting of normal cyclicality of semi's compounded by the disintegration of hundreds of start-up tech co's, ClEC's, etc., that were buying HUGE amounts of equipment that was loaded with silicon(note the demand for communications equipment, networking equipment and webserv related software and equipment was vastly out of proportion to the demand increase for the services that these company's offer) and all of that overlaid by a general ecomonic slowdown. I don't believe its at all clear where all this leads. If the next 3-4 months see a serious increase in unemployment it will lead to a major cutback in consumer spending and a serious recession will ensue during the second half of this year. If, however, layoffs don't cascade and economic activity stabilizes enough for company's to hold onto their works and consumers keep their confidence then things will start to brighten during the second half. Until the overall course of the U.S. and world economy is clearer I don't believe that any tech rally can sustain itself. The market will rally in anticipation of a turn in the economy and if news comes in confirming that speculation it will continue to go up. However, if the news that comes in does not confirm it the rally will fold and things will go right back down to where they were or lower. My guess is that the the sharp recession is more likely than anything else.

To: Proud_Infidel who wrote (9677)	4/12/2001 11:08:57 PM
From: Katherine Derbyshire	Respond to of 10921

Unfortunately, I don't have good data on the number of new fabs, either last year or in general. WSTS (I think) tracks global manufacturing capacity in terms of square inches of silicon. That's probably a more meaningful measure, since it includes incremental expansions to existing lines as well as new greenfield fabs. I'm not sure what your point is, though. There is a significant lag between ordering of a piece of equipment and that equipment's delivery at the customer site, and then another significant lag before the equipment is actually up and producing product wafers. Almost all new capacity that came online in calendar 2000 used equipment ordered in 1999. Equipment ordered in 2000 (and not pushed out due to the downturn) will create new capacity (and lots of it, given the number of orders) this year. In fact, this lag is part of the reason why the industry is so cyclical in the first place. The inherent delay in building a fab is longer than the horizon for accurate forecasts. Katherine