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

To: Dr. Bob who wrote (18531)	4/4/1998 11:16:00 AM
From: Clarksterh	Read Replies (3) \| Respond to of 70976

Dr. White - The bulls don't respond to Aki because his argument is no different than it has been for the last 2 months. In addition, as with many people on these boards, he imputes to his opponents a position that his opponents have never taken, and then attacks that. So in the interest of debate, I'll at least give the other side: 1) Japan is going to tank. Well, maybe, but the situation is not materially different than it was a year ago or even 7 years ago. Sure, the SEA loans are now defunct, but the government is promising to inject liquidity to offset this loss. Personally I think this is incredibly dumb, but it does mean that the situation isn't all that much different from the last 7 years, and they have been in denail that long. Why not a little longer? The crash, when (if?) it happens, will be psychological in nature, and who can tell what it will take to trigger that? 2) DRAMs are overcapacity. Sure. Who has said differently on this board anytime in the last 6 months? The question is when will the excess capacity be used up. If, as most analysts believe, it is by the end of the year, then you should expect the DRAM companies to bottom on their orders sometime in the July timeframe. As for the reason for the DRAM glut being government capital subsidies, tell us something we don't know. But does the reason really matter? 3) Intel cutback on CapEx. Note that at the same time he mentions that its because they are losing market share, not because of a weak demand for PC's. So, the demand for silicon is likely to be as great as ever. Also, the 'commoditization' of the PC microprocessor has happened before, most recently being 4 years ago with the 486. 4) Aki has skipped over the foundry data. The foundries have had a banner year for the last year, and although some of them are now predicting a glut in the next 2 or 3 years :), none are prediciting an imminent one. Having made the bullish argument, I agree that Japan and the commoditization of the PC worry me, but IMO the situation isn't any different than it was 4 months ago, with the possible exception of psychology. (e.g. More people seem to be aware that Japan is treading close to the edge even if they do seem to be ignorant of the fact that this has been true for 7 years.) IMO, the most important argument is about the overall market being overvalued. If the US market goes, so will AMAT. But, can anyone other than Elaine G predict that (sarcasm drips). Clark