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

To: Kirk © who wrote (10435)	7/5/2003 8:54:31 PM
From: Donald Wennerstrom	Read Replies (3) \| Respond to of 95487

Yes, how much capacity, but also, how useful is that capacity. How much has to be replaced as time marches on? How much new equipment is necessary for applications where finer line widths are required. We could go on and on asking these questions - this is obviously a very complex issue. But lets go back to a simpler(but still complex) issue - when is demand for chips going to increase? Just "eyeballing" Gottfried's chart, it will take about 8 months for chip sales to rise to 14B. That's assuming the rate of increase is about the same as it has been the past 3 months - certainly not a sure thing. A lot can happen in 8 months. It could go down or flatten out in the next 8 months as well. If it did go to 14B a month, does that mean semi-equip spending will increase? If I look back to the 95 and 97 time frame, we may be closer to a peak than a valley. We could be experiencing a double top formation on chip sales and soon be entering a contraction phase again. We are clearly experiencing a new bottom process for the semi-equips now compared to 96 and 98. Those bottoms were sharply defined by bottoming 1 month and then the curve started back up the next month heading toward a new top. This time the bottom is now essentially 26 months long(ignoring the slight upticks in the first part of 2002 that made everyone think that we were off to a new top in the last half of 2002). The first half of 2003 is nearly a mirror image of 2001 in terms of semi-equip spending. Also, try another exercise with Gottfried's chart. Go back to any 26 month period beginning in Jan 95. No matter which 26 month period you pick, the sum of money spent during that period is more than was spent during the just completed 26 month period. A good question for all of us that we need an answer for is what is going to make semi-equip spending increase, and most importantly, when? Don