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Technology Stocks : Ultratech Stepper -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (2503)	6/1/1998 12:07:00 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 3696

Pete: I don't think the postponement means much of anything to UTEK. It would only impact P-GILD sales and this presupposes that INTC was looking to take P-GILD units for the production of MERCED and there is no evidence that this was the case. So there was nothing built into the stock price to reflect this possibility. Besides, P-GILD deliveries have been pushed out to 1999 anyway so no big deal there. What is important for P-GILD is the push below .25u geometries to .18u. Currently, AMAT is doing approximately 50% of revenues on a run rate in technology sales for .25u and below. Only 20-20% of world capacity is at .25u or below. So there is a push in this direction. Re: "If the economy slows during the 1998 second half and profits get squeezed, do you see companies increasing demand for faster chips with the smaller geometries as a solution for shrinking margins in this no-inflation environment?" Well you are asking a macro question to a micro kind of guy <g>. I am sure there are more people on this thread who are more qualified to answer this question. I assume you are talking about the United States in your question. Given your scenario (slowing economy), I would venture to guess you would see a decrease in the overall rate of growth for chip sales in this country. Yea, I am really going out on a limb here <g>. With respect to computer sales, there are many companies out there that are perfectly happy with their current Pentium class computers and are unimpressed with Windows '98. I don't think a slow growth type environment is going to make them run any faster to upgrade unless there is company specific software that would enhance their profit margins immediately. There is a dynamic tension between upgrading for increased margins and that hunker down cut-cost type of mentality for the same goal. I think the latter type of mentality would begin to take its toll on chip sales in the environment you describe. But what do I know <g>?