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

To: Proud_Infidel who wrote (5364)	5/10/1998 7:41:00 PM
From: shane forbes	Read Replies (1) \| Respond to of 10921

Brian: Interesting article - if the Koreans start/resume spending AMAT & boys will be very happy. Even if they are right, at this point I am not convinced the large orders for equipment will be coming in just right now - my feeling is that these are at least 2 quarters away likely 3 and the really big stuff starts much later on. Re: the 256MB market being 9.4 billion. Correct me if I'm wrong but I would guess that DRAM is anywhere from 20 to 30% of total chip revenue right now - that is, somewhere around 30-40 billion per year. With the uptick in pricing likely in the next 2 years or so, Windows 98, Windows NT etc etc I would think the DRAM market MAY recover to around 40%+ of the chip market (I think as recently as 1995 (big pay day) DRAM may have been around 50% of total chip revenue). In light of the fact that I would guess total chip revenue would be somewhere around 230-260 billion or so in 2001, 9.4 billion (3.5% of total chip revenue) actually looks kind of small doesn't it? I do not know the present distribution of memory MB so this is just a big-time WAG. Also the implication is that 64 MB would be standard by then - I would have thought the 256MB would be the standard by then and so I would have expected a higher %ge than 3.5%... I think the main premise is where do they get the money since the last few generations of DRAM have done squat in terms of profit and right now DRAM prices are not good. With no profits in recent quarters, weak balance sheets become even weaker,... no money for new cap ex. I guess there are ways out - divest non-core businesses, INTC and gang make equity investments, IMF money etc etc. BUT even with all of this my guess is they need DRAM prices to recover. And though I suspect there is a n/t pick up in DRAM, I do not know how long this will last or whether it is the start of a permanent pick up. They need cash and they need it badly. Shane.