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

To: Gottfried who wrote (9652)	10/26/1997 3:21:00 PM
From: davesd	Respond to of 70976

Gottfried, in Feb 1996, the chip prices were falling and inventory was building, yet fabs were still in expandion mode. The markets expected a slowdown and had knocked down AMAT price significantly...yet the Feb AMAT conf call was very bullish...."We believe the semiconductor industry is poised for long-term growth as demand for high-end device applications continues" Then in May conf call Morgan confirmed the slowdown..."We are cautious about the overall outlook for the worldwide semiconductor industry as the semiconductor device industry growth rate slows in 1996 compared to the rapid growth rate in 1994 and 1995. In addition, the impact of pricing changes on memory devices has caused some customers to slow investment plans from prior expectations." This would suggest that they had no clue what was happening, and if they had a clue..they choose not to tell investors till the last minute. You pick the scenario. Semi caps sell to Fabs who sell their chips to distributors who sell their products to assembler who sell their products to device makers who sell their products to consumers. If the device makers screw up their forecasts and order too much stuff..guess what..it ripples back down the chain and guess who is the last to feel it. Remember their customer are the fabs, the fabs got very different customers to whom semi cap companies are not exposed to. dave