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

To: Zeev Hed who wrote (50773)	8/18/2001 3:51:38 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Zeev, Re: The next upcycle maybe much shorter than the traditional cycle and less robust. This is derived from a macroeconomic model and a "chip specific" model (which may be both wrong). You will need to better explain this; less robust how? I cannot see why you believe the next cycle will be shorter. probably compensated for this as well. Another way to look at it is to assume that this year' chip shipments may get close to $170 B (that is a little higher than "official estimates"), but capacity utilization industry wide is at about 70% (in some areas, like Taiwan, only 50%), What numbers are you looking at? Most Taiwanese fabs are running in the 20% to 30% range, not 50%. This type of low utilization will inevitably lead to an underspending on capex, which will come back to bite them in the butt whenever the next cycle comes. FWIW, I disagree with nearly everything in your post, not because I am super-Bullish on the immediate future, but because the nature of the chip and chip-equipment biz are too dynamic to make such detailed forecasts two to three years out. Contrary to what you say, I do not believe for a second that the next cycle will be "less robust'" whatever that means. Attempting to gauge where ASP's will be for DRAM or where GDP will be two years from now is a futile game, which only makes one look foolish IMO. Why not simply buy the best companies in the industry and see where the stocks go? BK