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: Math Junkie who wrote (4755)	2/9/1998 2:54:00 AM
From: shane forbes	Read Replies (2) \| Respond to of 10921

True and last time we had serious slowdown in the semiconductor companies' unit demand. From all I've seen so far, unit demand is very strong across most areas. I don't really expect things to get as bad as the last one, but my concern is that the spike in prices recently seems to have occurred too quickly. And the quarters with the bad news may possibly be ahead of AMAT not behind them! And I really think late Dec. and early Jan. saw a big slowdown in orders. I think whereas the US markets are OK, the Japanese do a lot of trade with ASIA and presumably they are hurting a bit now. I expect to see the Japanese to reduce spending in the cap. equip area. Add the Koreans. Compound that with the DRAM situation and I just don't see why the stock prices have gone up so quickly the last few weeks! I mentioned this earlier but the Koreans happily continued to spend in 1996 even with the lowered demand for DRAM. This likely added much to the AMAT bottom line and I don't think this will happen going forward in the next couple of quarters. --- I think it all boils down to this for me: DRAM equates to huge spending and something like 80% of the world's DRAM is produced in Japan, Korea and Taiwan(?). Since the first two are hurting and there is a current oversupply in DRAM who will pick up all the slack? They've (mainly Koreans) hurt themselves overspending on cap-equip in 1996 and 1997 thinking that the market would improve. It did not. And now even if they want to they cannot spend on new fabs. Also I'm sure what the front-end semi-equips would love is new fabs. My sense is that we will instead be seeing a lot of fab upgrades and there's not enough here to overcome the lack of new fab spending. (for instance in last q's AMAT c.call one thing that really jumped out at me was the lack of big orders.) And for the coup de gras add to this the 300 mm pushouts. ---

To: Math Junkie who wrote (4755)	2/9/1998 10:18:00 AM
From: Mason Barge	Respond to of 10921

<<There's no reason to assume this slowdown will be as bad as the last one, because last time the slowdown was worldwide, and this time it is just one region.>> That's true, and brings up a finer point. There isn't just a slowdown in Korea, there's a complete halt to capital spending, and a severe slowdown in Japan on a day-to-day basis. So the earnings impact is just as bad, overall, in the short term. But you're certainly right IMO about the broader picture -- the demand is there, unlike the past two cycle bottoms which were characterized by a large lessening in IC demand. It's just that some of the players have no money and no credit to buy the equipment they need. Just look at the Americans and Europeans