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

To: Kirk © who wrote (6335)	10/20/2002 10:51:02 PM
From: Sarmad Y. Hermiz	Read Replies (1) \| Respond to of 95487

Kirk, Is going fabless a decision made for technical reasons ? Or is it for the same reason most people rent an apartment instead of buying a house: Simply, they don't have the money to buy! I agree with your points, and I'm puzzled that sometimes fab ownership is presented as a technical disadvantage. It just does not seem to be a big advantage to be restricted to using facilities that anyone can rent. A company like Intel can have two distinct areas of competition. Its chip designs, and its process innovations. Whereas a fabless company has only its chips and marketing ability. Besides, I don't see how a paid-for facility can be a liability, even if under-utilized. And for sure, Intel manages the utilization of its fabs very well. In the disk drive business, all the companies that outsourced all their manufacturing have dropped out of the business. Their fabless model simply did not survive the constant-change technology, and the coninual need to lower cost every month. In fact, the surviving disk makers are moving back toward an integrated manufacturing model. Sarmad

To: Kirk © who wrote (6335)	10/20/2002 11:35:45 PM
From: Cary Salsberg	Respond to of 95487

Morgan and Bagley think you should have a 0.13u, copper. low K-dielectric fab line.<g> Your ideas of "shortage" come from the past when companies had to go it alone and the cycle went to extremes. The current environment provides for measured technology development and capacity additions closer to end user demand. This coupled with the slow recovery of end user demand makes it very unlikely that foundries will be left very much behind when things improve. INTC will not be able to license ALTR and XLNX technology. INTC may join IBM and be a foundry for PLDs. I have been evaluating "real men have fabs" for a while. I have decided that I would much rather invest in fabless and equipment vendors. If you want to make comparisons, use 10-Qs and 10-Ks and compile your own data based on reading the accompanying text. The Quicken data was not very useful. One time events (PLD inventory writeoffs) completely skewed the data.