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

To: Cary Salsberg who wrote (9975)	5/22/2004 12:57:50 PM
From: Sam Citron	Read Replies (1) \| Respond to of 25522

semi cycles have been caused by huge excesses, and this can be remedied by deploying capital in smaller increments I had the impression that as tool costs increase, the fixed cost component rises, making it more difficult to employ capital in smaller increments. I would welcome it if you could demonstrate this assumption is inaccurate. The article you included talks about "commodity" industries that are capital intensive...Most[semis] do not exhibit commodity pricing characteristics That is a good point, Cary. The article does indeed refer to commodities markets which are marked by cyclical price patterns, and it is probably dangerous to apply such results to semis. It seems clear that the focus of Dr. Luenberger's Investment Science program at Stanford [with corporate sponsorshipis from Cadence, HP, etc.] is upon optimization of technology investment and that certain modifications should be and probably are being made in the model for non-commodity industries. The bubble and its aftermath were not an "industry" boom-bust cycle and I am not suggesting that exogenously caused cycles can be prevented by prudent behavior. That is also a very interesting and important distinction. I think it would be quite valuable to contact Luenberger and get his reaction to your theory. Sam