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

To: Cary Salsberg who wrote (49815)	7/26/2001 12:19:15 PM
From: Fred Levine	Respond to of 70976

Fron SSB-- After the market close, the semiconductor equipment association SEMI > (Semiconductor Equipment and Materials International) released their > preliminary monthly book to bill (B:B) for the month of June. According > to SEMI, preliminary June bookings of $704.7 million and billings of > $1,310.8 million led to a better than expected B:B of 0.54. "Book to Bill > Note <http://webbank10.ny.ssmb.com/wt/research/pub/notes/SBD45349.html>" > > Glen Yeung our equipment analyst was looking for a B:B of 0.48-0.51. > While the better than expected B:B was partly attributable to billings > slightly below our estimates, bookings were nonetheless better than our > $610-$630 million estimate and up from the May bookings of $604 mln. As > Glen reminds us, bookings is the important number as it is an indicator of > future sales. > > Specifically when you break out the contribution from Front end bookings > (up 1.6%) versus Back end bookings (down 19%) we note that this is the > second positive sequential number from the Front end and supports Glen's > thesis that bookings bottomed in April. Glen also feels that positive new > orders from IBM should provide additional support for the September > quarter. > > Strategy: The Front end bookings number should be viewed by the market as > a positive. However, in the current environment the market will be looking > for additional evidence that the current uptick is not a head fake like > the ones in 1996 and 1998. Glen points out that previously on both > occasions, the year on year declines in bookings at that time were less > than 15% - this time the industry is down 71% YOY. > > Again, it is hard to imagine the market making a sustainable near term > move on this news, but we remain comfortable continuing to partial > position into our top picks in the equipment space (AMAT, NVLS, LRCX, > ACLS) on any near term weakness. > fred

To: Cary Salsberg who wrote (49815)	7/26/2001 3:03:27 PM
From: Sam Citron	Read Replies (4) \| Respond to of 70976

Looking at those (split-adjusted) Oct. '98 lows in some of your favorite semi equips: LRCX $3 NVLS $7 AMAT $11 KLAC $10 We sure have come a long way, baby! They sure seem like delicious entry points today, but who here really thinks they are a possibility? A revisit of '98 trough prices would represent 75% to 90% further declines from current (depressed?) levels. As hard as it seems to imagine that we might sustain such further declines, it is even harder to figure out why things looked so bleak back then. My recollection is that the '98 trough was during the "Asian contagion" when Thailand and other former Asian Tigers were haing serious macroeconomic problems as they competed to devalue in order to maintain exports in the face of stiffening competition from each other and China. Outside of Asia, PC growth was still strong and internet boom was still in its heyday. Sure there was a typical boom-bust cycle in semis and equip at that time, but I do not remember anything resembling today's uncertainty or collapse of end-user demand. Of course, this might be just my own myopia or amnesia. Still something appears out of whack here. Either we were way too cheap in Oct. '98 or we are way too expensive at this juncture. You, however, seem practically alone on this thread in recognizing this latter possibility. Were the '98 trough valuations just a manifestation of pure FEAR and irrational momentum-driven selling, or were the markets reflecting something in the air for this sector back then that was far more terrifying than current conditions? Or could it simply be that portfolio managers had another choice back in '98 that is not present today, i.e., internet stocks? Sam