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

To: Justa Werkenstiff who wrote (21373)	7/10/1998 1:17:00 PM
From: Fortinwit	Read Replies (1) \| Respond to of 70976

In Infrastructure's morning note today, there's some fairly bearish news regarding Intel that has direct ramifications for AMAT. Carl quotes a research report from BT Alex Brown's Byron Walker, the semiconductor equipment analyst over there. To wit: - INTC is taking extraordinary cost-cutting measures (this is old news) - INTC is cancelling orders across the board (this is not new news either). However, in cases where it is contractually obligated to take delivery, this equipment is being stored for later installation, which will dampen order rates in the eventual recovery - INTC is forcing equip companies to inventory spare parts that have historically been bought outright. - INTC is training its own people to do equip maintenance and are reducing or eliminating service contracts with equip vendors. This is new news (to me) and since AMAT and others have historically seen a pretty good chunk of revenue come from this area during downturns, this is certainly bad news, although I question how much maintenance INTC can actually do on their own. Infrastructure, FWIW, continue to look for a horrible summer and fall, and see any rallies this summer as trading rallies. F. (still short KLIC and NVLS)