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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: James R.Gross who wrote (10384)	6/12/2002 1:05:11 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 10921

AMAT's CEO at Bear Stearns Conference Keynote Presentation Highlights 1. How sustainable is the recovery? Mr. Morgan feels the economy is slowly getting better. With a long-term view he said, in each area, things are getting better. Even in Japan, things are improving, albeit not as fast as people may like. Mr. Morgan commented that it seems the underpinnings continue to improve. In the semiconductor industry in particular he said, phase I (consumer) is driving current demand; phase II (corporate) is what’s needed to continue driving demand. 2. What are the driving forces behind Moore’s Law. As an example, Mr. Morgan pointed out that only about 10% of the world’s population has cellphones, and maybe 3% have PCs. As the world population grows, and the population adopts technology, this will continue to drive Moore’s Law. Add to that the increasingly complicated and power-hungry applications that continue to come along. The ongoing outsourcing trend will continue to drive leading edge business for Applied, according to Mr. Morgan. 3. What is the current oversupply / undersupply situation with .18 micron and .13 micron technologies? Mr. Morgan pointed out that .18 micron capacity was what was in place when the tech “bubble” burst, but while demand for semiconductors dried up, the advance of technology did not. As semiconductor companies try to remain on the cutting edge of technology, they must invest in cutting edge technology to remain competitive when demand returns. 4. The “Perfect Storm.” Mr. Morgan noted that the semiconductor industry is simultaneously moving to copper, sub-wavelength lithography, and low-k dielectrics. He feels this is the most significant transformation in the last 25 years. In addition to the three technology drivers, there is also the move to 300mm wafer sizes, and all semiconductor companies that want to move forward technologically are going to do so at the same time to remain competitive. 5. The Changing Landscape in the Semiconductor Industry. The move to outsourcing, and fabless semiconductor companies. Mr. Morgan noted that as foundries pick up production requirements, they also must pick up technology capabilities. 6. China. Applied has been involved in China for close to 20 years. Mr. Morgan feels that any company that is in business today, must have a strategy for China. He noted that it is a great opportunity for Applied, which has a large market share in China and currently has approximately $500M in orders from the region. 7. Are consumers really going to want all these new devices? Is end-user demand really going to materialize? Mr. Morgan commented that the big challenge is getting the infrastructure in place to encourage the use of new technologies. As an example, he noted that the move to wireless technology will drive huge demand for new devices and technologies. 8. Are we going to see a slowdown in purchasing of equipment as we realize efficiencies from new technologies? Mt. Morgan pointed out that in each technology transition, there is always an increase in the number of processes required, and as the equipment becomes more advanced, it becomes more costly. 9. What potential changes in the semiconductor industry are in the future? The industry is changing more rapidly Mr. Morgan said, and the companies that can afford the ever increasing R&D costs have an advantage, and we are seeing companies pool their R&D resources. 10. The shift from hardware providers to “solution” providers. There is a very close relationship between the device manufacturers and the equipment suppliers, and it’s getting closer as technology gets more advanced, Mr. Morgan pointed out. Customers continue to get more and more confident that equipment suppliers can provide solutions, and are more and more willing to rely on them. As the value proposition moves upstream, it will enable semiconductor companies to ramp their processes more quickly, reducing cycle time.