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

To: Katherine Derbyshire who wrote (59042)	1/18/2002 12:06:04 AM
From: Sam Citron	Read Replies (2) \| Respond to of 70976

Katherine, Wow! I had no idea that building and land costs could account for an even greater share of reported capex budget than semi equipment sales. But if we are to adequately explain the difference between Joe Osha's average 24% capex/sales and your 11% equip sales/semi sales, this seems to be the most plausible explanation. If so, China, with cheap land and construction labor, has an even bigger foundry advantage than I had previously imagined. Thanks for educating me. Sam

To: Katherine Derbyshire who wrote (59042)	1/18/2002 1:50:28 AM
From: C_Johnson	Read Replies (1) \| Respond to of 70976

Hi All, Haven't been around in while but here's $0.02 for the capital spending discussion. Having just done a presentation with charts portraying capital spending ratios I did a double check see if my numbers were way off. Here's a few numbers from the worldwide semiconductor equipment sales spreadsheet (produced by SEMI) and came up with these numbers for total equipment sales: 1999: $25,496,673 2000: $48,385,428 2001: $26,024,188* *The 2001 number is 11 months of data and one month extrapolated by averaging the past 11. It's probably not too far off. As you all know every group has a different way of calculating these numbers. The numbers here are the lowest of any that are released. They are from the total line and I do not use them to calculate my ratios. The way I calculate capital spending for fabs takes out a couple of categories (like the equipment used in wafer manufacturing and mask making) and adds in a bit for spares, maintenance and engineering services. Yes, some of this is gray area. No one has the right answer. The numbers from VLSI Research are bigger than SEMI's so they probably include things like spares, maintenance and engineering services and maybe even some companies that do not report to SEMI. DQ's numbers tend to be closer to VLSI's than they are to the ones from SEMI. Everyone is trying to be as accurate as they can but there will always be some discrepancies. If you want to look at some charts, there's a link to the slides from last night's presentation on this page: infras.com Back to the grindstone.... Carl