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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Stu Bishop who wrote (9579)	10/25/1997 10:01:00 PM
From: davesd	Read Replies (2) \| Respond to of 70976

Stu...you said... 1. INTC decided to reprioritize their spending. They are postponing completion of one fab because they decided to concentrate on another fab in Israel first. Not a cut back, just a shifting of spending from one fab to another. 2. Companies buy new equipment not just to increase capacity. New equipment is required everytime semiconductors evolve enough to render existing tooling obsolete. That is, new generations of chips, new designs, require more sophisticated manufacturing equipment. 3. Your entire bearish argument takes hypothetical to the most extreme limits. This could happen, then this would happen, then it gets worse and worse ... so the stocks will fall further. Give me a break! Yes demand must increase (catch up) to support the huge gains of the past year (or past six months). Hence, expect share prices to increase at a slower rate going forward. I say...... 1. INTC, was planning to build both FABs. Israel in 1998 and Texas in 1999. Now they have pushed out the Israel Fab to 1999 (because they have to change the tool orders) and pushout the Texas into 2000. Either way you slice it..they both got pushed out 1 year. Therefore deffering capacity and spending on two fabs for one year. At leat that is the way I understood it. 2. I agree with this point, however it the situation we are in now, I would suspect that they will slow the spending. As someone mentioned (think it was Big Bucks), alot of the tools can do alot more than they are currently doing with minor low cost upgrades compared to buying new tools. 3. You expect demand to catch up to the share gains, why not expect the share price to reflect the demand. If all the commodity fabs keep upgrading...when do you see their business getting profitable?? dave