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

To: Proud_Infidel who wrote (20666)	9/19/2006 10:55:03 AM
From: Kirk ©	Read Replies (2) \| Respond to of 25522

"Tully predicts that 350 of the roughly 1,000 companies making semiconductors will be either absorbed or disappear in the next ten years and that the number of companies able to build their own factories will fall by half." This will hurt AMAT and other chip tool makers in the long run since fewer customers means they can squeeze their suppliers (AMAT) more since who else is AMAT going to sell the equipment to? I'm seeing this with FNSR where Cisco was reported to be buying Finisar optical components, marking them up 10x and making $1B a year in profits from this since Cisco gear will only work with Cisco optical sub assemblies. My Finisar, accumulated between $1.01 and $1.99, is doing great at $3.41, but it could be 10 times higher if it was not being beaten up by Cisco on price but selling to 10 networkers who would pay a premium for key parts before their competition could get them. We'll need to watch margins at the tool companies carefully... The good news is this is probably 5 to 10 years away before it is a big problem... and I'll probably have taken most of my profits OUT of this sector by then.