Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Gottfried who wrote (20672)	6/23/1998 1:57:00 AM
From: Paul V.	Read Replies (1) \| Respond to of 70976

Gottfried, and threaders, Looks as if CEO Morgan is looking ahead. Let's tell Teri to take it easy on Clinton. He's taking Morgan with him to China.<G> Paul V> >Dow Jones Newswires -- June 22, 1998 Applied's CEO Sees China Strategy Paying Off, But Slowly By Christopher Grimes NEW YORK (Dow Jones)--With about a third of Applied Materials Inc.'s (AMAT) business concentrated in Asia, James Morgan, the company's top executive, is undoubtedly thinking hard about the troubled region. On his trip there this week, Morgan will spend some of his time telling chip makers that despite current economic conditions, they must invest in new equipment - or risk falling behind the technology curve. This is a message that troubled Asian chip manufacturers have heard before, both from companies like Applied Materials, which sell such equipment, and from other industry giants like Intel Corp. (INTC). But the bulk of Morgan's time in Asia will be spent in a country that generates only a small portion of his company's sales and has so far been unscathed by the turmoil: China. For him, the potential that nation represents is every bit as crucial as any of the near-term economic woes in the region. "You can't ignore a fifth of the world's population," Morgan told Dow Jones. Morgan and other U.S. businessmen will congregate in Shanghai along with President Clinton to press the flesh with business leaders there. The trip will be another in a long string for Morgan: Applied's CEO since 1976, he has been making trips to China since the early 1980s to try an encourage the genesis of a semiconductor industry there. "It's very slow going, but being early gives you the oppprtunity to be the major participant" in a new market, Morgan said. "It's beginning to gather momentum." The company booked $70 million in new orders from China in the second quarter - just 7% of the $1.03 billion in total new orders, but nonetheless a record sum. Most of that came from a new chip factory being built jointly by NEC Corp. of Japan and the Shougang Group of Hong Kong. Motorola Inc. (MOT) is also building a plant in Tianjin. Most of the plants in China have produced older-generation chips, he said, but the new developments in the region will focus on high-end technology. In general, construction and spending worldwide has slowed this year, as chip companies have taken a cautious course. The semiconductor market is expected to grow at only a low-single-digit rate this year, cripped by the Asian economic mess and an oversupply of memory chips. The turmoil in Asia is "impacting the decision-making process" at chip companies, Applied Materials CEO Morgan said. "It's caused a lot of uncertainty and caused them to delay capital investments." While Morgan thinks the Asian situation hasn't quite hit bottom yet, he remains optimistic long-term. The challenge is to persuade companies to be optimistic, too, and to keep spending in preparation for better times down the road. He said he'll emphasize to Japanese chip producers that there "has to be new investment" in equipment if "they are going to compete in the next round" of technology. "It's important in these times to have meetings with customers," he said. Morgan is cautious in his outlook for the new technology that uses copper to connect a semiconductor's transistors instead of the standard aluminum. Copper conducts electricity better than aluminum, but has a tendency to corrupt a chip's silicon. International Business Machines Corp. (IBM) said in September that it had figured out a way around this problem. Some chip equipment companies, such as Novellus Systems Inc. (NVLS), have introduced machines to build copper chips, and Applied is expected to unveil its technology this summer. But Morgan said the technology, while promising, isn't going to revolutionize the industry just yet. "I think it's a nice potential market, but the rate of development won't be as fast as people think," Morgan said. No one has yet produced copper chips on a large scale yet, he said, predicting the process could take "an extended period of time" to get right. Still, he's confident in Applied's copper products. "We've been fortunate to have been working on this for a long time, we have a family pf products and we feel we'll be a leading company in there," he said. -By Christopher Grimes; 201-938-5253<

To: Gottfried who wrote (20672)	6/23/1998 12:42:00 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

For those waiting for firming DRAM spot prices: smithweb.com The chart below does not show the same trend; it shows declining DRAM per MB spot prices, something different the the above site. What is needed to drive DRAM capex is firming prices for advanced DRAM, such as the 64MB shown in the first link. The second link takes into account all of the DRAM being sold, even the 4, 8 and 16 being sold for a loss because of overcapacity and the need to drive out all of the obsolete inventories. users.cts.com