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

To: Paul V. who wrote (5210)	1/29/2003 11:48:43 PM
From: Cary Salsberg	Read Replies (2) \| Respond to of 25522

Hi Paul, During conference calls, most of the companies break out sales and orders by region. There is no doubt that China and the rest of the Pacific Rim, Japan, Korea, Taiwan, etc., are big factors. Currently, Japan, Korea, and Taiwan are the major areas at the leading edge of semi manufacturing. China is moving in that direction, but hasn't arrived. China is a factor in the growth of end user demand. I don't think your characterizations of "tremendous" and "explosion" are a true description of the effect these countries have on world demand, yet. They are growing from a small base. I think there will be a number of factors that accelerate technology growth beyond 2004, but I think that technology moving beyond the bubble hangover will be most important.

To: Paul V. who wrote (5210)	1/30/2003 5:15:26 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 25522

Yes, those three companies will benefit from the 2B people in China and India moving from Poor to NotSoPoor (and therefore using many more chips). Chips are no longer used only in wealthy countries by middle-class-or-better folks. Going from a per capita income of 200$ to 1000$ gets you off the flat beginning of the S-shaped chip-use-vs.-income curve. One caveat though, is that consumption in China is currently being propped up by massive deficit spending, by the Chinese government. It is ironic that, all through the Mao decades, China was a good credit risk, as they didn't pile up debt (they squeezed the peasants instead). Now that they too are BorrowAndSpend CowboyCapitalists, they risk going the way of Russia and Argentina. Of those three stocks, I only like AMAT. The other two, I have crossed off my list, due to the ugly things exposed by the DeBubbling. And I still only like AMAT for a LT position, in the 5-10 price range. Like Cary (the other thread Cassandra), I think the main effect controlling the stock price, this year and next, will be DeBubbling. If (big if) the upcoming war goes well, we could get a big rally in the SOX, 30-40% isn't unreasonable. A selling opportunity; macro reality will intrude on the euphoria: 1. Consumer spending will be flat to down, nil chance of any big increase in consumer spending in 2003 or 2004. At best, we hold even. 2. the excesses of the Bubble, especially debt levels and stock overvaluation, have not been cleared. 3. Without sharp increases in consumer spending, it is unrealistic to expect any big increase in business spending, either. This will hit capital-equipment makers more than anyone else. 4. the various technology transitions in semi-equip can and will be put on hold, when end-demand falls off (or just doesn't increase as fast as capacity is). We all should have learned this lesson, having watched the 300mm transition get put off repeatedly; but hope springs eternal. I'm guessing the SOX is in a 200-400 range through 2003.