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

To: Gottfried who wrote (50249)	8/7/2001 11:45:51 AM
From: Proud_Infidel	Respond to of 70976

Concerns grow over 200-mm wafer shortages in next upturn Delays in 300-mm fabs and fallback to 200-mm capacity present dilemma for substrate suppliers By J. Robert Lineback Semiconductor Business News (08/07/01 10:47 a.m. EST) SAN JOSE -- While chip makers throttle production in response to the downturn, concern is growing over a potential chokepoint in the next recovery: availability of 200-mm wafer substrates. Until now, many market-recovery scenarios have been based on an upswing served by the start of 300-mm wafer fabs. But opinions and forecasts are changing as chip makers begin to push out their plans for multi-billion dollar 300-mm fabs. According to a new outlook presented by Dataquest Inc. at Semicon West in July, demand for 200-mm (8-inch) silicon substrates could unexpectedly surge while 300-mm wafer shipments ramp at a slower rate than previously expected. The leading scenario now shows 200-mm wafer demand reaching a maximum peak volume of 7.5-to-7.8 million substrates per month in the next recovery cycle, said analyst Takashi Ogawa at Dataquest. That upside forecast for 200-mm wafers is 25-to-30% higher than the other Dataquest scenario, which shows 200-mm substrate demand peaking at 6.0-to-6.5 million wafers per month in the recovery. Suppliers of blank silicon wafers appear to have the ability to deliver 6.0-to-6.5 million substrates per month, if they increase output with improvements in plant efficiencies and minor investments, Ogawa told managers attending Dataquest's Semicon West forecasting session last month. But that forecast is based on the assumption that no more major 200-mm wafer fabs would be built by chip makers, he cautioned. With some 300-mm fab projections being delayed, the likelihood of new 200-mm frontend lines is growing. Dataquest now believes wafer substrate suppliers will face a difficult decision: attempt to set up 300-mm material production lines or build new 200-mm capacity. San Jose-based Dataquest is now warning of potential shortages of 200-mm wafers in the 2004-2005 timeframe because of the lack of capacity to produce blank substrates. That concern was underscored with the release of second-quarter wafer shipment data by the Semiconductor Equipment and Materials International (SEMI) trade group in San Jose. SEMI's report shows shipments of blank silicon wafers used in chip fabs dropping 21% to just 988 million square inches compared to 1.25 billion square inches in Q1 of 2001 (see Aug. 6 story). "Virtually all 200-mm investment plans have been put on hold," warned Stanley T. Myers, president and CEO of SEMI. "The market will eventually improve, but the question remains as to how quickly silicon suppliers could respond to a demand increase." The big problem facing wafer substrate suppliers has been the losses piled up over the last downturn. Many silicon material merchants were just starting to dig their way out of a huge hole when 200-mm wafer prices began to increase last year, when the market started into its steep slide. Dataquest's current forecast for silicon materials shows the chip industry needing 8.9 billion square inches of blank wafer substrates in 2006, more than double that is expected to be shipped in 2001. Wafer material suppliers are expected to see a 21% drop in silicon demand this year from over 5.5 million square inches in 2000. Silicon wafer substrate shipments (measured in square inches) will start to grow again in 2002 by 17%, said Dataquest. In 2003, wafer substrate shipments will grow 20%, followed by 23% in 2004 and 10% in 2005 before growth slows to 4% in 2006, according to the current five-year forecast. A full recovery in unit demand will most likely not occur until the second quarter of 2002, said Dataquest analyst Ogawa. However, a sequential decline in quarterly wafer shipments is expected to end in the current third quarter, he told industry managers during the Semicon West briefing in San Francisco. By 2006, a little more than half of the silicon substrates used by chip manufacturers will be 200-mm (8-inch) diameter, according to Dataquest's new forecast. Ironically, that's a greater share than in 2000, when 200-mm wafers represented 47.7% of the silicon substrates shipped in the chip industry (see table below). Silicon wafer shipments by diameters Substrate diameter 2000 2006 300-mm 1.3% 21.1% 200-mm 47.7% 51.4% 150-mm 39.4% 17.2% 125-mm 12.7% 7.2% Under 125-mm 5.9% 3.0% Source: Dataquest July 2001 forecast

To: Gottfried who wrote (50249)	8/7/2001 11:45:53 AM
From: michael97123	Read Replies (2) \| Respond to of 70976

"significant" structural issues that are overshadowing structural issues." Dont you get it G? These guys have nothing to say so they say nothing. Actually I hope that is a misprint because it is too pathetic for words. It is amazing how 4 large firms line up on both sides on this issue. The one truth is that they will all say they made the correct call(lt, mt, st) regardless of where the stock goes. What a racket. mike PS My grandson concurs

To: Gottfried who wrote (50249)	8/7/2001 11:48:45 AM
From: advocatedevil	Read Replies (1) \| Respond to of 70976

FWIW, ST-Trading update: I just made a couple of trades on my dark-side positions. I began my recent series of plays on 7/24. Here's the status: 7/24 Short LRCX at $26.20 (1000 shares) 7/24 Cover LRCX at $24.26 (gain +$1940) 7/26 Short LRCX at $27.12 (1000 shares) 8/7 (currently open - paper loss -$1450) 7/27 Short LRCX at 28.31 (1000 shares) 8/7 (currently open - paper loss -$260)) 7/31 Short LRCX at $28.85 (1000 shares) 8/7 (currently open - paper gain +$280) 8/1 Short LRCX at $30.05 (1000 shares) 8/1 Short LRCX at $30.09 (1000 shares) 8/7 Cover LRCX at $28.57 (gain +$3000) 8/1 Sold AMAT at $48.80 (2000 shares) 8/7 Bought back AMAT at $46.76 (cost basis gain +$4080) Totals Realized gains: +$4940 Cost basis gains: +$4080 Paper losses: -$1430 Play(s) status: +$7590 Holding 2000 shares AMAT long at $46.76 Holding 3000 shares LRCX short at (avg) $28.09 AdvocateDevil