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

To: davesd who wrote (18741)	4/12/1998 9:19:00 PM
From: Clarksterh	Respond to of 70976

Dave - been saying that FAB capacity is in the 90% range since 2 years ago..... Who said that? I remember from July of 96 when the reports were of DRAM capacity utilization of high 70's to low 80's and logic was mid 80's. As for continued shrinks, that can only go on so long with minimal upgrades. At some point the 'basic' equipment (e.g. furnaces, strippers, ...) will not handle the next shrink and they will have to upgrade everything, not just the masks and steppers. The question is, when? Given the amount of time elapsed since the last major installation period in 94/95/early 96, I suspect that time is within a year.(?) Finally, as for PC's - Intel's pain is hardly an indication of lack of end user demand given that Intel now has only of 65% of sub $1000 computers (the fastest growing segment). And PC unit sales were up 30% in January (still don't have more recent numbers). Clark

To: davesd who wrote (18741)	4/12/1998 10:05:00 PM
From: Ian@SI	Respond to of 70976

Dave, While leading edge capacity has generally been highly used, I haven't seen any indication that overall capacity has been consistently at or over 90% for the last 2 years. Do you have a source that you would share for this info? In the February - March time frame (this year), there were almost 150 fabs on the books to be constructed during the next 3-6 years. I haven't seen an update, but I suspect that number is still well over 130. Re PC memory growth: Several things will drive that. Increased volume is likely with PCs retailing at less than $800. Win98 will stimulate some buying by those waiting for this long preannounced OS. And it's likely that anyone upgrading to Win98 will probably need more memory as well. (I have no facts, just a guess based upon MSFT's track record). Digital cameras will stimulate growth somewhat. These are becoming less expensive and more capable. HDTV will stimulate memory growth. ... All in all, I tend to see "this glass" as half full. The longer that chip makers hold back on major upgrades or building new fabs, the greater the surge will be when growth resumes. IMO, it's not a question of "if" but rather "when" - an opinion shared by most, if not all, of the bears on this thread. I'd just rather be invested now and not miss the next cycle because I don't know any other sector which offers similar opportunity for those with a horizon beyond 2 years. As previously mentioned, each to his / her own strategy / tactics. Ian.