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

To: Jacob Snyder who wrote (4899)	1/14/2003 7:25:55 PM
From: BWAC	Respond to of 25522

I'm assuming a certain amount of capex is necessary to both maintain and lead forward.

To: Jacob Snyder who wrote (4899)	1/15/2003 9:34:51 PM
From: brushwud	Read Replies (1) \| Respond to of 25522

<<FIRST time ever in the last 11 years I reviewed below a years depreciation charge. I think that is significant.>> Maybe that series of years with depreciation > capex was a fluke, like getting a series of heads on a coin-toss. It happens occasionally, but it has zero predictive value. Intel capex is driven by their best-guess about forward supply/demand for semis in the markets they sell into. Depreciation, and the tax consequences of it, are a secondary (or less) consideration. (What was said was that there was a series of ten years with depreciation < capex, until now, not the other way around.) Depreciation is kind of a moving average of capital spending, since capex gets depreciated over a few years. A growing company would invest more each year, which would lead to increased depreciation each year, but the charge for depreciation would always lag current capex. So it is indeed significant that Intel is curtailing capital investment to that degree. But Intel's capital spending seems more like a coincident indicator than a forward one. They underinvested in 98-99, then overinvested in 01-02.