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To: Gary Burton who wrote (14630)	7/3/1998 9:32:00 PM
From: Trader X	Respond to of 17305

I think you have a good point, Gary... as I've noticed quite a few references made by companies who've decided to do nothing about the Y2K problem until the year 2000. A classic, don't fix what isn't broken mentality. Only, when what's broken becomes apparent, the ripples will be felt by the large companies who actually did spend money to fix the problem. Like when Joe's auto widgets stops getting "on time" inventory shipments, GM will have a hard time getting those widgets. This should effect all areas of the economy for at least a year. tx

To: Gary Burton who wrote (14630)	7/4/1998 1:00:00 PM
From: Andrew Vance	Read Replies (2) \| Respond to of 17305

AV-I really haven't determined what the real Y2K impact will be for the IC manufacturing plants or the semiconductor equipment sector. Most of the issues I see are slightly problematic with internal financial reporting systems (keyword internal) and some diagnostic or SPC (Statisitcal Process Control) software that may be part of the equipment software packages. Neither is catastrophic in my opinion. In the equipment arena, you might lose one day's worth of production at most and very few, if any, process functions rely on knowing the date. In the area of the financial reporting systems, I see Accounts Receivable or Payable along with other financial systems like Payroll getting screwed up with bills and payroll deductions. I am not sure if WIP (work in Progress), Inventory, and other floor control systems are that much of an issue. I see this as more of a nuisance that might get companies into trouble based on poorly prepared financial reports tot he shareholders. This, if it happens, opens up the floodgates of shareholder lawsuits. Therefore, the YR2K work being done in this sector is more directed at providing accurate financial reports and good accounting data to the investment community along with insuring bills are paid and received properly (including employee compensation) than it is at ensuring the steady stream of product come out of the manufacturing pipeline. This is unlike the banks and the financial markets where interest rates, dividends and accurate stock transactions are critical to their survival. The YR2K issue will create a great deal of problems worldwide but it will not effect those businesses that run with calculators, handwritten account ledgers, and manual internal reporting systems unless it is the failure to receive payments from the highly automated and computerized businesses they deal with. In this light, both the IC manufacturing and equipment businesses are at less risk than most other businesses, in my opinion. They certainly do not find themselves at either end of the pendulum and most likely will be somewhere closer to the trouble-free part of the YR2K issue. The degree of automation in this industry is measured more in units per hour and not on certain things happening on certain dates. And as automated as it is, much of the equipment operates independently of other equipment unlike other industreies. I think we must try to separate the manufacturing issues from the financial reporting issues. And in a crunch, no one's IC business is that robust that they could not physically look at the purchase order, physically locate the product in the wafer fab, prepare shipment documents with verification of receipt and then prepare a bill for payment. I do not think Merrill Lynch could execute all of its daily trades with a handwritten ledger, though. Bottom Line: I do not see a crisis in this sector but I could be wrong. I just see some minor issues that can readily be addressed. This is not an "embedded controller" intensive industry based on knowing the proper date. It is far from the air traffic controller issue and the possible chaos in the utility industry that supplies power to all of us. There is the issue, shutting down power plants (including nuclear power plants), thereby crippling industries that rely on a steady flow of electricity to run their operations. This is the big issue facing most manufacturing plants. They can all be 100% YR2K compliant but if the local power substation goes off line for a YR2K issue due to an embedded controller, they are down as hard as if it was an internal YR2K issue. Andrew