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To: Donald Wennerstrom who wrote (41951)	12/2/2008 12:53:09 PM
From: Donald Wennerstrom	Respond to of 95616

Here is another release by SEMI yesterday on Fab construction. <<World Fab Forecast Shows Capacity Growth at Lowest Levels Since 2002 Fab Construction Spending to Decline by 41 percent SAN JOSE, California – December 1, 2008– According to the World Fab Forecast report, recently released by SEMI, worldwide fab capacity is expected to grow by five percent in 2008 and is currently expected to increase between four and five percent in 2009. From 2003 through 2007, semiconductor fab capacity increased near or above double-digits rates annually, but as a result of the global economic uncertainty capacity growth rates will be much lower for both 2008 and 2009. Wafer fab capacity is forecasted to reach 16.1 million wafers per month (in 200 mm equivalent wafer size) by the end of 2009 compared to 5.4 millions wafers per month capacity expected by year end 2008. Spending on fabs equipping in 2009 is expected to reach lowest levels since 2003. As a reaction to global economic uncertainty, oversupply, and falling average selling prices (ASP), most memory companies are opting to close their 200mm fabs. However, a number of these companies are maintaining smaller, but positive growth rates for their 300mm fabs. During the fourth quarter of 2008, foundries are expected to reach the lowest levels of utilization since 2002, and these levels are expected to remain low through the first half of 2009. All foundries are expected to reduce their capex throughout the coming year. For 2009, foundries are expected to maintain the strongest growth rate, with about eight percent, followed by MPU, and then memory fabs. The capacity growth rate for 300 mm fabs will be 22 percent and 12 percent in 2008 and in 2009, respectively. Construction began on five new fabs in 2008, and in 2009, another six new fab construction projects are expected to commence. Spending on fab construction projects in 2008 is expected to decline by 41 percent year-over-year (YoY), as projects are pushed out or put on hold. In 2009, the Americas and Japan are expected to be the only regions with positive growth rates for construction spending. Key drivers of this growth are companies such as Toshiba, the Flash Alliance JV and Panasonic The World Fab Forecast report provides in-depth analyses of capital expenditure, capacity, technology and products, down to the detail of each fab; and forecasts for the next 18 months. These tools are invaluable for understanding fab equipment and construction spending in detail, and learning more about capex for construction projects, fab equipping, technology level, and products.>>

To: Donald Wennerstrom who wrote (41951)	12/2/2008 4:07:48 PM
From: Pam	Read Replies (1) \| Respond to of 95616

Pam, Thanks for picking up on that article By Ionut Arghire, Hardware Editor on the SEMI forecast. You are welcome! Don, when you get a chance can you try and research the PEG ratio tables that you post here and see when and how quickly EPS estimates for LRCX came down so dramatically for 2009 and 2010? Same thing needs to happen with WFR, and analysts will not do that until their clients are out of it and/or management gives a lower guidance. Analysts these days have lost the courage to be bold and revise the estimates downwards until the management guide them first!