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To: nigel bates who wrote (13788)	5/12/1998 5:18:00 PM
From: Andrew Vance	Read Replies (2) \| Respond to of 17305

AV--You bring up a very interesting topic of conversation. Based on the news release yesterday, DD is exiting some businesses and getting hungry in others. I would like to turn the tables on the community and ask your question to the aggregate group. Like you, I agree that DD may go on a biotech buying spree. Which companies it might go after is a mystery to me at this point. Therefore, I would like the community to come up with some potential candidates and a good rationale or explanation for doing so. I think if the group could come up with a solid dozen or so candidates, we can discuss it amongst ourselves and come up with a highly select group to consider. I think we will have a good deal of time to do this over the next few weeks. as I type this, I am listening to the AMAT conference call. They had some nice or good things to report but it was not a good upbeat conference call. The tech sector is hurting and now two schools of thought are for it to bottom out 4th calendar quarter 98 or second quarter 99. AMAT does not think either is correct but will act accordingly relative to cost measures and their approach to their business. They are seeing good movement in orders for the 0.25 micron processing. AMAT sees the computer market growing 13% this year, down from the previous 15% number. AMAT believes they are growing marketshare in this downturn. They see new designs at 0.25 or below so even with a capacity issue, not all the unused capacity is able to do this type of technology. They also see industry capital spending down close to 10-15% from their customers. AMAT sees their CMP business growing and believe they are now #1 in this arena. We are now in the Q&A period. I have not given a great synopsis of this conference call and would encourage everyone to call in the replay number and listen to the whole call. It will be about 30 minutes without the Q&A. They are not projecting a good quarter going forward and to try to maintain their margins. They may have problems running at the $1 billion revenue rate per quarter but not by much. Expect revenues to be flat the upcoming quarter. The call is interesting to listen to since it gives insight into the technology, DRAMS, Logic design, PC demand, etal. Morgan is also stating that AMAT is trying to position itself to come out of this downturn well positioned and in good shape to maximize profits for the upturn when it occurs. As soon as the replay number is announced, I will post it. Andrew Update: the Q&A has now gone on for 30 minutes itself and is very informative and interesting from both a financial and technical perspective. Revenues have not dropped enough to announce layoffs. Drive revenue curve vs downsizing is their preference. Restructuring business units (or combining units) is another tool they could look at. Keep in mind, AMAT met their previous guidance levels and these may differ from market expectations.