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

To: Big Bucks who wrote (10166)	6/6/2004 12:58:10 AM
From: Cary Salsberg	Respond to of 25522

RE: "...not necessarily accurate..." We know that yield increases as production at a particular line width matures. We also know that, at the same time, newer line widths with much lower yields are introduced and become increasingly more important in filling end user demand. This dynamic produces an average yield which varies over time. If the variation is small, comparing wafer starts over time is pretty accurate. Based on anecdotal data about the increasing difficulty at each node in the road map, I would guess that average yield is trending down slowly. We are primarily concerned about the relationships: 1. equipment purchases and fab capacity; and 2. semi sales and fab utilization (actual wafer starts/ fab capacity in wafer starts). I think variations in yield will affect these relationships, but we will be looking for variations with larger granularity to determine the state of the cycle, so I am not prepared to discount the use of wafer starts because of yield variations.