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

To: rhering who wrote (8625)	1/28/2004 11:52:12 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 25522

Hi Roger, Re: He thought we were only 1/3 of the way through the upcycle and it had a long way to run It seems as though every analyst I hear talk (perhaps with the exception of Niles), complains we are overpriced and that the cycle is ending tomorrow, or thereabouts. I think after so many were so badly burned last time around, not just in semiconductors but in tech in general, there is a movement to be the first to call the cycle over, and we are already seeing them practically trip over each other to do so. I just happen to think they are wrong....and will be for some time. Brian

To: rhering who wrote (8625)	1/28/2004 12:18:59 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

More Fabs Coming in 2004, Firm Says Online staff -- 1/28/2004 Electronic News The value of new fabs starting construction or facilitization reached $21 billion in 2003 and Strategic Marketing Associates (SMA) expects it to climb even higher in 2004. In a report released by the firm today, SMA predicts 40 upgrades or new fab projects are likely to start construction in the next four quarters. In addition, 17 new fabs are expected to come online in the next four quarters. The new fabs coming online in 2004, plus the continued ramping of existing fabs, will drive capital spending up by 41 percent this year to $43 billion, SMA estimated. "The industry recovery is continuing to gain momentum with stronger chip sales and high capacity utilization," George Burns, president of SMA, said in a statement. "But the surprise is that equipment sales have been in a rut with relatively little growth. This is changing. We expect equipment sales to go through the roof this year." If the estimates come true, 2004 will mark the first good year for capital spending in the equipment industry since 2000. The report also states that while U.S. chip companies will increase their spending by 6 percent to $9.9 billion, the U.S. share of capital spending will continue to fall. Last year U.S. chip companies accounted for 30 percent of the industry's capital spending; this year they are expected to account for only 23 percent -- the lowest level ever. "It's outsourcing. Many U.S. companies want someone else to do the heavy investing," noted Burns. "That's why Asia/Pacific now accounts for more than 40 percent of all capital spending. That's where the foundries are. From now on, Asia/Pacific is going to be the leader. Not only in terms of spending, but also where the fabs will be built." Japanese companies will spend more than any other regional grouping of companies, SMA further reported. This is the first time Japanese companies have been in the top spot since 1994, Burns said, adding that Japanese companies will account for 25 percent of all capital spending this year. While Japanese companies only account for 11 percent of 300mm capacity now, they are taking a leadership position in building smaller, more affordable 300mm fabs for products other than DRAMs, SMA said, noting that most new fab construction will be 300mm as DRAM fabs continue to migrate to 300mm. Burns expects as many as five Japanese companies to build new 300mm fabs this year.

To: rhering who wrote (8625)	1/28/2004 3:11:47 PM
From: The Ox	Read Replies (1) \| Respond to of 25522

Hi Roger, My view echoes that of the analyst who says we are about a 1/3 of the way into this up cycle. I made 2 posts on Don's thread that layout my take, fwiw. In short, I believe the up cycle started in 3rd+4th quarter of 2003 and will end, at the earliest, in early 2006. However, it's very possible the cycle will be a bit more drawn out then the past 2 or 3 cycles and could peak in 2007. When I say peak, I mean max earnings potential, not necessarily stock prices. It's possible that accelerating demand could bring about the end of this cycle near the end of 2005 - but we will have to see huge demand (orders) coming in the these next 2 quarters to justify an early end. If this demand materializes quickly, we should all take note of it and we should be sure to realize that stock prices will peak substantially before the earnings peak hits. jmo