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

To: Katherine Derbyshire who wrote (48831)	7/8/2001 11:40:16 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 70976

Katherine, this is an interesting observation. I think that actually, things in this respect (Moore law) are going to get worse rather than better. I understand that Moore laws has at best another seven years in it (I would say .05 to .07 microns design features will signal the end), and frankly before that we may find that parts of circuits (like insulating barriers) cannot be further reduced due to quantum tunneling. Since within the next three/four years or so, the "end of Moore law" will become evident to many observers, it is quite possible that the next cycle up, might be the last in which semi equip behave so differently than all other traditional cap equipment companies. Design rules reduction, a main driver in lowering the cost and increasing the performance of chips, will no longer be a drive, and thus the pressure on chip companies to constantly change and upgrade their facilities will drastically diminish. Such a long term trend will negatively impact the peak valuations of semi-equip companies relative to their performance (peak shipments or peak profitability), and we may have already seen this peak in valuation metrics (not necessarily stock price) in the cycle that brought AMAT to about a peak of 10 times sales in the last cycle's high. Zeev