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: Big Bucks who wrote (7723)	10/24/2003 1:43:30 PM
From: rhering	Read Replies (1) \| Respond to of 25522

China's 5 Year Plan Looks like some of the China activity is a massive educational process to jump start domestic chip manufacturing. Near term I do not think using old technology at low volumes to sell into a limited (if not protected by trade barriers) market is economically viable. Although I'm sure the foundries are happy to get a good residual value for their old equipment. China's main advantage at this point is lower labor costs, although their environmental laws are probably a close second. Even given this, I would expect the cost structure of a automated 300MM FAB to crush any competing 200MM output in any high volume product mix. China's activity provides them an opportunity to develop an educated population base and probably more importantly a domestic supplier base for future FABS. It will be interesting to see over the next few years if they have a population lining up to buy rationed versions of old technology product when cheaper and higher technology imports are available, but not allowed in. At a minimum I would expect word has gone out that if you want to sell product in China you better have a plant here doing something. Regards, Roger

To: Big Bucks who wrote (7723)	10/24/2003 3:04:36 PM
From: C_Johnson	Read Replies (1) \| Respond to of 25522

Hello BB, A quick break to post a bit more. Glad you find the information of value. Everyone in the industry knows this activity in China is just the start of something much bigger. It is clear that manufacturing semiconductors has become an strategy of national importance to the government and the economy of China. I am certain there will be lousy starts, failures and many, many hurdles along the way but the long run situation is very important to the chip and chip equipment manufacturers. You all know this but I feel it is worth repeating. You mention "more bang for the buck with the use of trailing edge technology. I have a feeling that if the Chinese chip producers had their preference they would readily embrace more advanced manufacturing. Trade rules and restrictions that bar the transfer of advanced manufacturing technology to China are certainly playing a role in what they can and will manufacture during the coming years. This is a long term story that definitely will take a while to fully understand. Regards, Carl