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

To: Big Bucks who wrote (10140)	10/31/1997 12:03:00 PM
From: davesd	Respond to of 70976

Big Bucks, looks like we are thinking along the same lines...Over the last year MU has shrunk their die to the industry smallest without going to .25u....they are now moving to .3u. This is how they increased their bit production and market share. All this shrinking has been done by fine tuning the design and process tools. The others in the industry apporached it differently, they just added more capacity and tried to make more chips to gain market share, however their cost of production stayed the same....I think they will now try MU's apporach...it's alot cheaper. dave

To: Big Bucks who wrote (10140)	10/31/1997 4:29:00 PM
From: Lester e.	Read Replies (2) \| Respond to of 70976

Big Bucks, I hope you have plenty. It seems to me that those who are pessimistic that the demand for chips will decline and put Amat into further freefall aare missing the point. New uses for chips are being developed everyday. Who can imagine how many new uses will increase demand. New uses require new equipment. AMAt is a critical cog in the making of Semi-Conductor chips that power everything from jet planes to coffee grinders. With historical revenue in excess of 15% annually, impressive earnings growth and high operating margins the future looks rosy for AMAT. Sure bad things can happen but we have to stick with the odds. Upgrading capital equipment to make newer and better chips is vital to staying competitive in the world of Semi Conductor manufacturing. Those who retrench when the going gets tough will fall by the wayside. According to Semi Conductor Industry Assoc in their report last wednesday: 1. Global chip sales will grow 16.8% to 162.8 Billion in 1998 2. The SIA estimates semiconductor sales 139.1 Billion in 199r an increase over 1996"s 131.9 Billion. 3. They expect DRAM revennues to increase 20^ in 1998 and to go to a record 41.7 Billion by 2000. AMAT is not losing money, but making it hand over fist. They are not spending all this R & D money because they fear a decline in business. They are not busily advertising for 2300 technicians that they think they will not need. The cash they holding is to assure that the company will be ready to move in any direction it needs to move. What Morgan say at the conference call will be important, Then we can distinguish between the credibility of the company and the credibility of the analyst. AMAT stock has buckled in recent week weighed down by disappointing earnings expectations of other companies and a bad case of investor jitters, but IMHO this is not the time to bail out because of bad news, but a time to buy at lower prices. The tech sector is always subject to uncertainties because you have companies going out and creating new products, new services and new markets. Demand is not based on yesterdays technology. If I can dream of the future, can't you young guys do it too. Some earnings reports have not been good but what really has been hurting the stock is the forward guidance that companies have been giving anallysts about future earnings in 1998. The question is not whether technology is going to do well, but whether AMAT is going to participate. To understand forward earnings you have to understand AMAT's products and the users of those products. The company that has the best technology will produce the best new products. No other equipment maker can match AMAT's R&D. Chip makers will have to come to the leader to get the best new machinery if they are to survive. That is why I hve been long on AMAT for 5 years and expect to stay long for 5 more years. $4500 invested in 1991 is worth $50,000 at todays prices. If you are smart like Dhillon maybe you can time this market. If you are stupid like me you buy and buy and hold and hold. Sorry to be so long winded, but I have to bolster up my spirits in the light of all this bearish talk. I know you have this company at heart. Lester e.