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

To: Joe Sabatini who wrote (19098)	4/30/1998 9:41:00 AM
From: Teri Skogerboe	Respond to of 70976

More along the lines you mentioned...(I know it's slightly dated...) Overcapacity Leaves Uncertainty in Future Wafer Fab Equipment Market San Jose, California; February 18, 1998- General overcapacity, the Asian financial situation, capital restraint, liquidity issues, and high semiconductor unit demand with good PC growth have combined for an uncertain wafer fab equipment market, according to Dataquest. "Aggressive investment in 0.25-micron technology throughout 1997, leading to a stronger-than-expected year, has only exacerbated the persistent overcapacity in the industry," said Clark Fuhs, vice president and director for Dataquest's Semiconductor Equipment, Manufacturing, and Materials Worldwide program. "In 1997, for the third year in a row, the capital spending ratio as a percentage of semiconductor revenue exceeded 25 percent, and the two-year average is 30 percent." The equilibrium level is closer to 24 percent, remaining above the long-term average of 22 percent as the investment in "nonproductive" 300mm facilities proceeds. The industry overspent in 1997, and profitability and availability of capital will determine near-term spending, Mr. Fuhs said. Dataquest analyst continue to call 1998 a single-digit growth year, although essentially flat. The stronger-than-expected 1997 actually pushes the sustained recovery into mid-1999, putting the growth forecast for 1999 under 20 percent. Companies will continue to concentrate in technology, with emphasis on 0.25-micron and 300mm technology, along with investments in new interconnect materials and processes, according to Dataquest. Longer term, Dataquest projections have the wafer fab equipment market growing to more than $37 billion in the year 2000, from about $22 billion in 1998, and it is projected to show a 12 percent compound annual growth rate between 1996 and 2002, according to Dataquest. The Dataquest Market Trends Report, "Year-End 1997 Forecast: Capital Spending, Wafer Fab Equipment, and Silicon Markets," provides further analysis of the market, covering future trends and forecasts.