Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: John Dally who wrote (3583)	11/26/1997 8:25:00 PM
From: FJB	Read Replies (1) \| Respond to of 10921

John, Your bleak read of cap ex. plans for DRAM makers has already been discounted in the price of semi-equipment stocks IMHO. There is no doubt DRAM makers are selling at a loss if you include depreciation in the cost of production(excluding depreciation the marginal costs range from 2.50 to 4.50 for 16Mb). Nevertheless, semi-equipment spending will be up in '98. Not as much as it would have been pre-Asian crisis, but up. Some semi-equipment companies will grow very nicely. Here is an article concerning Korean Cap. Ex.(post meltdown). koreaherald.co.kr Although the Chaebols are reducing spending on the order of $Bs, I think semi capital goods will be one of the less effected areas because of the long-term strategic importance Korea places on this sector of the economy. You've got to pick your shorts very carefully in this sector. It doesn't make sense to me to short a stock after it has fallen 50% or more. Which companies do you think are still eligible for large downside moves or are you looking to catch a quick 5%-10% move down which I would agree is a good possibility? Bob

To: John Dally who wrote (3583)	11/26/1997 8:39:00 PM
From: Ian@SI	Respond to of 10921

John, In part, you're seeing a normal price decline when a part (the 16Mb chip) gets replaced (by the 64Mb chip). 4Mb and lesser density chips sell for about a $ now. They went through the same cost curve as the 16Mb chip is going through; and the 64Mb chip will go through and the 256Mb chip will go through and ... The 4 Mb chip had an extraordinarily long life. Now the 16Mb chip is likely to have an extraordinarily short life. To me, this implies more equipment sales faster than otherwise would have occurred as the DRAM makers migrate to DUV, 0.25u, etc. The MPU makers will be forced to 0.18u within the next 2 years or they won't stand a chance against MERCED. 6 300mm pilot lines will be in operation during 98. To me this indicates that there's a possibility that 300mm production could start a year ahead of schedule. If that happens the initial volume orders for 300mm equipment will come by the end of 98. I ask again, "What, if anything, do you see that's unusual? ...or even ominous for the EQUIPMENT makers? Ian.