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

To: Sarmad Y. Hermiz who wrote (11620)	10/2/2004 8:16:50 PM
From: Gottfried	Respond to of 25522

Sarmad, thanks for sharing your findings. I own both, chip makers and equipment makers. Looks like equipment spending will be a permanently smaller percentage of chip sales. Gottfried

To: Sarmad Y. Hermiz who wrote (11620)	10/2/2004 8:23:05 PM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 25522

Sarmad, that's interesting data from 2 of the biggest companies out there. It probably goes along with the fact of very high dollar value of semi-equips supplied during the 99/00/01 period to many chip manufacturing companies. When demand "dried up" in the 01/02/03 period, the chip companies were left with a lot of unused capacity. Then when demand came back in 03/04 the chip companies started to put that unused capacity to work instead of having to invest heavily immediately by buying more semi-equipment. Now they are operating at, or close to, capacity. In the meantime of course, a lot of "cross currents" are at work, ie, migration to copper, smaller line widths, etc that require a continual requirement for upgrades, new equipment and replacement of older equipment by the semi-equip manufacturers. Where this is all taking us is a little uncertain, however, I believe that if chip demand stays strong going forward, the semi-equips ought to do very well. As you know, there are several analysts who believe the semi-equips are headed into a downturn in 05. Not all analysts believe this way, however. As an example, AMAT has one more month to go(thru Oct) to close out FY04. With 31 analysts making predictions, the "ave" estimate for 04 is 0.85 - the min est is 0.84 and the max est is 0.89. It is a different story for FY05 however. Here the "ave" estimate for 05 is 1.12 - the min est is 0.78 and the max est is 1.35, a spread from low to high of 73 percent. This spread shows just how much uncertainty there is going forward - after all this is estimating results which are only 13 months away. A person could be much safer by investing in GE. Here the "ave" estimate for 05(DEC) is 1.78 - 15 months away. 19 analysts have a spread of 1.75 to 1.80(3 percent). Don