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To: Prasanna L Soni who wrote (15345)	8/21/1998 6:52:00 PM
From: Andrew Vance	Read Replies (2) \| Respond to of 17305

AV--The recovery may indeed take that long but I personally do not think so. You have too many expansions that were delayed because of market conditions, manufacturing process technology shifts like DUV, and pushouts waiting for the next wafer diameter implementation. You even have some fabs that are obsolete or getting close to being obsolete. The sector will have to kick in by the end of 1999, the latest or there will be hell to pay. A 2-3 year delay would put a great deal of the small enabling companies out of business along with some of the majors. ASMLF could not surivive on their own without a 1999 implementation of some DUV. I fear SVGI would just fold up its tents. Most certainly CFMT, SMTL, AEIS, MTSN, GSNX, AGAI, and a host of others would be bankrupt and picked up for pennies on a dollar by AMAT. Somewhere in 1999 or at the latest, early 2000, many IC manufacturers will need to have upgraded or built new facilities or be out of business. The useful technological life of some equipment would well past its capabilities and they would need to be replaced. With the die shrinks now being thrown about by the analysts as a means of remaining competitive, there will be a select group of companies who will sellinto those programs. The cost savings involved with die shrinks and 8" (200mm) processing will require a healthy amount of new equipment purcahses. The implementation of Copper or damascene will require new equipment. AND, the next generations of INTC processors will demand better testing equipment unless INTC decides to let their competition to catch up with them. This test equipment will require advanced devices from advance fabs. It is just not conceivable to me that it will take that long. As far as the Asian Crisis is concerned, I might agree with you. However, the IC industry is the foundation to their economy, IMO. IF they were not to get back on track in this sector for that long, they are as good as dead and will never recover because the European and US companies will step up and recapture the market that was theirs before the Asians came in with fiscally irresponsible practices to dominate this industry. Payback is a bummer. If this happens you will see more expansion in the US and Europe to more than make up for the drop in orders from the Pacific Rim. More importantly, the balance of trade would shift back into our favor. Asia needs to resolve their semiconductor crisis real fast in order to get their entire economies jumped started once again. But that is just my opinion. Andrew Andrew