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

To: Proud_Infidel who wrote (14034)	1/1/1998 9:23:00 PM
From: H James Morris	Read Replies (2) \| Respond to of 70976

Interesting article in latest Business Week (jan 12th, page 88) issue. It starts, After two years of bumpy results, executives in the computer and Semi industries were looking forward to a resurgence in 98. But that was before Asia's economic sniffles turned into a case of the flu (the article then changes the name of flu to disease). Bw then talks more upbeat, even suggesting Wall Street has been overreacting. James C. Morgan seems to agree. He is quoted as saying "His sales might get nicked 5% IF Korea slashes spending on chipmaking equipment in half (currently, worst case forecasts), a retrenchment he considers overly pessimistic. Although, it seems pretty clear that this Sector will experience its up's and downs and it might be a better market for gambler's or risk takers. I recommend Amat investors read this to get a better idea on what be in store for us. Happy New Year TaffyII

To: Proud_Infidel who wrote (14034)	1/1/1998 10:55:00 PM
From: Big Bucks	Respond to of 70976

Hi Brian, Lots of imbedded questions. . IYO, do you think there is a double-v as it were, a second downturn that could be as serious as the one in '96? I believe Amat will go up till Q1 earnings and then drop back thru the spring, mostly due to weakness in the semi-mfg sector and order delays from Asian fabs. I personally, will take profits above 25-35% if they occur and maintain available cash to buy on dips below $30, if they occur, after earnings. Investors should listen to AMAT's guidance on market conditions and estimations and "read between the lines" to filter out the "market speak", or inferred meanings. Q3 is a "toss up" at this time it is still 7+ months before announced results, to far to project, at this time, in these market conditions. If AMAT announces large orders in Q2 > $100M then I will feel more optimistic, remember AMAT has seen over $1B per quarter in revenues this past year. Another thing to watch is announced backlog, as this is the overhead support from orders outstanding from fiscal 1997. If backlog decreases below $700M, I think I would become worried since it was somewhere around $1.4B at the end of fiscal '97. Are you betting that we will see a down year in capex? Probably, lots of fab delays/pushouts announced by Korea, Japan, Intel, and other chip manufacturers. These companies need to see increased profits/margins in order to have capital to fund new fabs and upgrade existing fabs. 300mm is still 1-1/2 - 2 years away before large orders come in, IMHO. AMAT should continue to gain market share in newer technologies since it has the budget for large R&D development efforts while its competitors are just struggling to stay afloat/viable, thru the downturn. Fabs will be looking for value, but also for future upgradability or enhanced processing capability from new equipment purchases that can be easily upgraded without having to purchase a whole new equipment set in 1-2 years. They will want to be able to depreciate the equipment over the next 2 generations of geometries of 0.25uM and 0.18uM without having to re-invest before the fab/equipment pays for itself. Just my opinion, BB