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

To: John Chalker who wrote (4604)	1/26/1998 11:44:00 PM
From: shane forbes	Respond to of 10921

Chalks, I would not characterize the industry-wide overcapacity as either accidental or deliberate. Probably foolish would be a better term. To be nicer call it bad planning. Or just acknowledge the fact that with every new fab you don't just increase capacity in minute 1-2% increments but instead in huge chunks. Thus virtually immediately once the new fabs are running the industry is in an overcapacity stage. The difference this time was that since the boom time '94-'95 was unusually large the semiconductor makers really went overboard and believing wildly optimistic projections (as it turned out) and the end of cyclicity, went into a serious overbuilding stage. Which is where we stand now. Especially in DRAM. Someone once said that you need a degree in psychology to understand the spending patterns in this industry! Anyway it looks like we're being set up for boom time in 1999-2000. Especially w/ SEA problems and accompanying slowdown in capacity expansions. When demand normalizes there ought to be an under-supply somewhere in that time frame.