Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (4722)	1/4/2003 12:32:56 AM
From: Sarmad Y. Hermiz	Respond to of 25522

>> BTW, chip sales were $18B [left scale] per month in late 2000. Thanks, for correction. The % of utilized capacity looks to be approx 0.75. Capacity utilization is under-stated because of lower chip ASP's. So very likely spare capacity for producing up-to-date chips will be all used up at the end of 2003. None of this is new. Cary has pointed out that capacity util of newest equip is above 90%. So it is just a question of how long will the old equip hang around. My estimate is the half life is approx 3 years. So we just have to wait the rest of this year to take out the '97 high in semi-equip bookings of approx $1.8B. Sarmad

To: Gottfried who wrote (4722)	1/4/2003 10:50:24 AM
From: robert b furman	Read Replies (2) \| Respond to of 25522

Hi G, That is really the crux. In a supply short environment ASP's expand and carry dollars thru the roof.Leaders reap wonderful margins and the wanna be's come along and flood the market at a later date. The degree to which another "killer Ap" comes along and we get reprieve from excess capacity.Technology advances are the stuff of ongoing stability,as the quest for continuous improvement is a mantra in this industry - even the "take no risk d-rams producers" are now embracing the long awaited 300 mm - which was to have happened one or two cycles ago.gg I like Jacobs thoughts regarding your graphs.I would like to second his request. More specifically,I'd request two lines: A median line - a line that shows the midpoint of the extremes - both peak and bottom.I'd guess the peak of 99-2000 needs to have a trough of 01,02,and 03 of equal area .Then we can expect to crawl out of the funk we've been in so long now. Secondly,I'd like to see a very long term regression line. This would show us the LONG TERM exponential growth of chips.The excess demand and excess supply provides the wonderful peaks and valleys that we must learn to properly play or is that patiently play? At least I'd like to get better at properly playing - that is with less patience. When shipments take off over bookings,what I believe we "outside observors see",is an industry holding back on capacity in an effort to create the much missed pricing power. This is a common sense reaction to an industry that has weathered excess inventories and the pain of "working thru an inventory glut". I've been their in my industry before and believe me - when you get back to lean you vow never to go there again - unless of course the greed of big margins is once again tasted.Then you want more and MORE AND MORE.<VBG> Now what we must ascertain is if this leading of shipments will get us into bookings that have an anemic rise in equipment bookings that quickly once again reaches excess capacity - such as in 95-96 cycle,or will we lead into a brave new world as in the 98-2000 cycle which featured a telecom buildout like the world has never even dreamt of. To be sure the internet drove the P.C. cycle and that piggybacked a huge new demand for all kinds of chips. Since the Telco's are burdened with debt and the previous olygopoly appears to be the long term survivors - my bet is that broadband will now take the proven road of go as you pay vs brave new leaders jumpfrogging the "old tech" with venture capital. As much as hurts my ego and pride - I become more aligned to Cary's time frame of next major cycle peak in 07-08.Having dashed my it will be quicker than that stand - I qualify that as a major cycle peak. There was a lot of money to be made in the 97 runup and I missed it back then.It is those subtle cycles that we must catch between now and that big major cycle top that I think Cary has pretty well nailed. New technology developers will be the homeruns to be had in these smaller cycle tops - the homeruns that are made from Mergers and Acquisitions.The top 10 will be the buyers of the developers of future new techniques. As always "Thank You" for your excellent charts.With those two simple lines we might better see the cycles and the long term direction of this industry over "our lives" Thanks again, Bob