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To: Proud_Infidel who wrote (13929)	5/19/1998 12:13:00 PM
From: Andrew Vance	Read Replies (1) \| Respond to of 17305

AV--I get mixed messages about ASMLF. Most recently, an associate of mine returned from a "foundry" tour in Korea and Taiwan where they were "mining" for potentisl foundry partners for their advanced manufacturing processes. This fact finding mission seemed to indicate a heavy desire to go with the Nikon systems, going forward. There were some outstanding issues with ASMLF relative to performance. This was the gist of his conversation with me, giving me the perception that Nikon may have the edge over in the Pacific Rim. However, it al;so appears that ASMLF may be the system of choice in the new facilities and expansions over in Europe. So for whatever they might (keyword might) lose over in Asia, it seems that they may make it back up with European sales. For me, I would lovwe to see confirmation as to which company INTC really goes with for its 1999 implementation of their 0.18u process technology. The crash you suggest probably is getting close to bottoming out. IF 1999 is the transition year for the big turn around, you need to factor in equipment manufacturing cycle times, existing backlogs, and the historical delivery times for equipment. In certaain cases you are looking at 3-6 manufacturing cycle times for certain equipment and 3-18 month delivery times to the end customer. Granted, the delivery time should inlude or overlap some of the manufacturing cycle time but you also have to include certain backlogs. We have seen pushouts and some cancellations but when you look at the whole picture, certain things must occur to keep the 1999/2000 recovery and expansion on schedule. 1. Capital Appropriations Request and Purchase placement cycle time (2-4 months) 2. Delivery time (4-12 months) 3. Installation and Acceptance of equipment (1-2 months) 4. Process Equipment production qualification (1-3 months) 5. Customer notification and qualification cycle (2-6 months) 6. New process technology implementation with the associated process, equipment, and customer qualifications. I may not have covered all bases here but if we use the INTC new processor production implementation of Nov 1999 as an example, you get: Nov 1999 - Production implementation of "Coppermine" Processor Sep 1999 - Introduction of "Coppermine" processor for customer acceptance testing. Jul 1999 - Prototyping and intial start of "Coppermine" chip in wafer Fab. May 1999 - Final process qualification cycle begins for all 0.18u process modules for burn in and customer QA qualification cycles. Apr 1999 - Final Production qualification of all new equipment and processes as well as accpetance of all equipment from the vendor. Mar 1999 - Final delivery and installation of equipment for the 0.18u production area. Jun/Sep 1998 - Customer orders to ensure delivery of equipment to meet production ramp up schedule. (depending on the piece of equipment). May/Jul 1998 -Purchase orders and CARs in place for next generation of equipment. What is interesting here is that I took some liberties to establish May as the turning point. However, if the late 1999 implementation does remain on schedule for most companies, they really are behind the 8-ball now. Almost like the YR2K issue if you would just now begin to take actions and begin the process. Given this type of timeline and factoring in a protracted Asian Crisis pushing the 1999 recovery to early/mid 2000, we are about 3 months away from the cycle to begin. What I find real funny is that the pundits seem to look out no further than 6 months over the horizon but they do not factor in the 12-18 "cycle" that must be endured from Purchase order to production implementation of a device in an advanced technology. This next buying cycle in the industry is for advanced processes that cannot be run on the existing equipemnt base. It is also close to being a wafer size transition also (BTW-notice that the wafer size issue has been separated from the technology advancement. Too much to handle at one time, it seems). I am still negative to neutral on the tech sector today even though I am establishing some Dec99 position strategies. However, I am trying to look just beyond the normal "summer Doldrums" of the Tech Sector. I am still hoping for a sideways action until Labor day before the fun begins. I think we will have anice 4th calendar quarter leading into a flat first quarter 1999 and finally follwed by a strong stock price recovery starting second quarter 1999. Andrew