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

To: matt dillabough who wrote (11012)	7/27/2004 2:28:29 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

New Semi Equip Spending to Continue into 2005 Online staff -- Electronic News, 7/27/2004 Spending to equip semiconductor fabs is expected to increase by 40 percent this year and should grow well into 2005, but at a slower pace, according to the latest research by Strategic Marketing Associates. Total capital equipment spending between Q2 and Q3 2005 is expected to reach $52 billion in more than 180 fabs, with the Asia-Pacific region accounting for 50 percent or more of all spending, the Santa Cruz, Calif.-based market research firm reported. The firm also predicts that as much as 60 percent of all spending will be spent on equipment for either DRAM or foundry fabs and that as 300mm continues to grow in importance, accounting for 74 percent of all spending by Q3 2005, up from 52 percent in Q2. “Unless the U.S. economy goes flat, we expect the momentum of new fab activity to fuel growth of equipment spending well into 2005, if not all the way through the year,” said George Burns, president of Strategic Marketing Associates, in a statement.

To: matt dillabough who wrote (11012)	7/27/2004 8:35:17 PM
From: Cary Salsberg	Read Replies (2) \| Respond to of 25522

RE: "Q2 inventories rose to 77 days, up from 74 days in Q1 and 71 days in Q403; that's still well below the peak level of 105 days reported in Q101, but notes that days of inventory have risen for two quarters in a row after declining for 11 quarters previously." So, after 11 quarters of decline, the number came to rest at 71 days. One would believe that 71 days was not excessive, possibly less than what expanding sales would require. From this bottom the increases were 4.2% and 4.0%. Since days of inventory is determined by the value of the current quarter's sales and the value of inventory, an increase in inventory days during a period of rising sales represents a bigger % increase in inventory than the % increase in number of days. Absolute inventory value increases would be valuable here. From this data it is not possible to know if the industry has "over-anticipated demand". Fab utilization is very high and sales are expected to grow next quarter. Higher inventory may be an appropriate step to counter possible fab capacity induced shortages. I don't know and I suspect Merrill Lynch doesn't either. They probably accurately reported inventory days.