To: Justa Werkenstiff who wrote (14981 ) 7/22/1998 1:52:00 AM From: Andrew Vance Read Replies (2) | Respond to
*AV*--I am going to answer in one post just to drage it out another day.Late this year at best and probably first quarter next year. Companies have tightened belt for rest of year and are now putting 1999 Capital Appropriations suggestions together for the October Capital cycle going into 1999. Correct but I do not envision this taking off in this calendar year especially with the types of leadtimes that might exist. Delivery could be as early as first QTR 99. Keep in mind, companies are now probably scrambling for a wafer size strategy. I think we have both 0.18u AND 200mm expansions clouding the minds of management. Mixed bag with most of it down. Pockets of good were ASYT and ATMI, to name a few. Underattended, underwhelming from an excitement level, low enthusiasm, lower attendance by sales forces for individual companies, wrong individuals attending, very little "purchasing" going on, but a great deal of tire kicking and probing questions. I hadn't given much thought to the number so yours looks acceptable. No V shaped recovery like you said. I see a low level roller coaster effect with a good deal of back and forth movement around 10% swings winding up nowhere, then a gradual incline where roller coaster is still in affect but lows get higher and highs get a little higher. There will be an EVENT to create the herd mentality rush to the sector. This will come with a slew of new fab constructions, a turn in the DRAMs, announced design wins for 0.18u, increased orders for DUV steppers, and a few other things. It will also come as a result of normal sector rotation. Semiconductors are out of favor while Biotech, Banking, Telecom, Internet are supposedly hot. I have a focus list of under 10 stocks that are being charted for early signs of a turn in this sector. It consists of those stocks that may be the first to turn and signal a recovery in the works. Nix to #1. Even though money is tight as you suggest, #2 (overcapacity) is the real killer. The SEA boys are trying to recoup from 2 things: overcapcity and pathetic margins due to price erosion in DRAMs. The are trying to convert some of the DRAM fabs to Logic and ASICs to pick up the slack in both cpacity and margins. Hell, INTC will start to see margin erosion as IDTI, AMD, and NSM, pick up steam.
