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

To: Pink Minion who wrote (6375)	7/3/2003 1:45:32 PM
From: Cary Salsberg	Respond to of 25522

RE: "...nature of fab construction..." Previous cycles were dominated by companies that built their own fabs. Build cycles occurred when demand outstripped supply and prices increased or fell far more slowly than normal. Build cycles were characterized by over building which held the seeds of the next downturn. The current situation is dominated by consortiums and foundries and is primarily influenced by the cost of tools and the acceleration of shrink rates. There is much less chance that the past extremes of overcapacity and undercapacity will be reached. Also, the secular increase in chip unit volumes, which characterized previous cycles, was interrupted by the bubble and its bursting. You are correct to point out that the PC dominated the chip market in the past. Processors and memory were the lion's share of the PC chip cost. Now, chips have broader application. More applications with more varieties of chips also contribute to less extreme cycles.