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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (2508)	3/30/2002 9:21:13 AM
From: robert b furman	Respond to of 95622

Hi Cary, If its any consolation ,it still is early for the Fiber Optic Components,Software and EMS sectors. Bob

To: Cary Salsberg who wrote (2508)	3/30/2002 1:47:48 PM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 95622

My career has not been in the semiconductor business, but I have always been employed by "manufacturing companies" that produce hardware and software to be sold as an end product. My experience in that capacity says that capital investment is required to develop new products(R&D phase) and then more capital equipment is required to make production quantities. In both cases, spending on capital equipment leads the return from R&D and production deliveries. RtS in the post Message 17263352 has listed the following from a marketwatch news article <<The latest P4 chips available next week will be made using 200mm wafers, but in a month the P4 2.4 GHz is expected to be made from 300mm wafers. Also, the chips are made using 0.13 micron technology. The 300mm wafers combined with the processing technology at 0.13 microns results in lower costs and higher performance.>> For other companies to keep up with Intel, capital equipment must be purchased to keep them competitive on cost and performance. Just because there is unused 200 mm wafer capacity available to produce chips doesn't mean that it can be used competitively to produce chips. A new standard has been set and companies will be forced to upgrade their capital equipment universe to remain competitive IMO. Since a new "upcycle" is just beginning, it seems to me that capital equipment orders are needed to be placed immediately by the semiconductor makers to meet the new demand. Once they get the new equipment and produce the chips, their sales and profits will rise, but that is a few months later down the road after the semi-equip build-up cycle. As noted by the tables on Bookings and Billings that have been previously posted, as well as the charts that Gottfried has posted depicting the data in graphical form, the bottom part of the cycle this time has been deep and long compared to the cycles in 1996 and 1998. Bookings by the semi-equips has been minimal for the past 11 months. Message 17219471 Big improvements in Bookings for the semi-equips should be coming soon. I think the recent outstanding performance by the semi-equip components of the SOX compared to the semiconductor makers reflect that anticipated improvement. The semiconductor makers will have to wait a little further to gain their day in the sun. However, that suggests that the "laggards" in the SOX should be watched carefully during the next few weeks/months for signs of life. One example that just occurred this week is MOT. The chart pattern looks like it might be ready to "break out". There are probably others as well. Don