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

To: Cary Salsberg who wrote (6625)	11/2/2002 12:25:42 PM
From: Alastair McIntosh	Read Replies (1) \| Respond to of 95530

Hi Cary. YoY IC unit growth hit over 30% this summer. This is in line with peak growth rates of the last three cycle tops. Sorry that you missed it. With regard to "most forecasts are for a flat 4th quarter" I don't think that this is the case. Recent estimates call for a QoQ increase of 8% for end markets in Q4 over Q3. While this is below the average Q4/Q3 growth of 14% it is by no means flat. A pickup is certainly estimated for 2003 but coming off a low sales base with low capacity utilization rates will do little or nothing for SCE sales in 2003. I believe that the declining cash flow to sales ratio for chip companies is a secular trend. The five year average operating cash flow to sales of chip companies has declined from 19% in the early 1990's to 11% for the past 5 years. Until capacity utilization increases enough to take pressure of IC ASPs this will not change significantly. I believe that we are several years away from capacity buys in the industry.