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

To: Gottfried who wrote (10144)	6/5/2004 11:50:33 AM
From: Cary Salsberg	Read Replies (1) \| Respond to of 25522

Gottfried, You say you "almost ignore PE" and that might have worked in the past, but semi equip sales and orders have been very different this time and, as you point out, analysts have been depressing prices by contending that the up cycle end is imminent. I am primarily interested in 2 relationships: 1. Semi revenue and actual wafer starts; and 2. Equipment revenue and fab capacity expressed as potential wafer starts. I don't think current behavior is cyclical and I don't think a typical historical top, one that is followed by a precipitous move down, is going to occur any time soon. I believe unit demand for semis will continue to rise at strong rates. Revenue will depend on unit demand and ASPs. ASPs will be strongly negatively affected if capacity begins to significantly outstrip demand. I don't think that is a given, but we won't need to guess if we monitor the 2 relationships I listed. Cary