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

To: Jay M. Harris who wrote (3958)	12/18/1997 4:29:00 PM
From: Clarksterh	Respond to of 10921

Jay - I am very aware that the feature size has shrunk dramaticly (sp?) over the last 1-2 years, and all while reducing capital outlays. But, my point is that that can not continue forever. At some point significant new purchases of equipment will have to be made to continue shrinking, and given that they haven't spent much money upgrading for so long, that point is likely to come soon. And, Micron in particular is likely to benefit from this fact (MU is particularly adept at taking maximum advantage of die shrinking), and from the fact that their biggest competitors (Korean and Japanese companies) are likely to have a hard time getting access to the required capital to compete. As for the equipment companies, MU by itself (or even in combination with Taiwan and TI) is unlikely to be able to be able to build as many plants as would have been built had Korea remained fully in the game, but nonetheless, it should be a significant expansion. Bottom line - the whole reason cyclical industries are cyclical is exactly because they don't like to spend capital in a downturn, so then they have huge upturns. And vis versa. I guess we should just agree to disagree (although we don't actually disagree that much. I think that demand for semi equip will drop for the next six months, but not due to overcapacity per se, but just uncertainty causing cautiousness.) Thanks for the informed debate. Clark