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

To: Big Bucks who wrote (23226)	8/23/1998 11:15:00 PM
From: Paul V.	Read Replies (1) \| Respond to of 70976

Big Bucks, >In the mean time, productivity enhancements and new technology equipment advances like copper, dual damascene, cmp, high density etching and low K dielectrics, deep UV lithography at 200mm will continue to be the bread and butter of the industry for a while. This means sporatic sales in various fabs to upgrade existing equipment or to replace "outdated" equipment as productivity enhancements are required to maintain chip technology leadership. I estimate that the available "market" for this upgrade technology will be somewhere around 30-40% of the 1997 market, for the next 2+ years< How do you see the above outlook translating in BTB numbers, and then price targets over the next 12 and 18 months? When I looked at DW AMAT cycle it was almost 12 months exactly from the top of one cycle to the low and then 12 months again from the low to the high. This kind of supports what Lester E. has said about AMAT doubling every 2 or 2.5 years. Could your above senario allow Lester E. doubling to occur on schedule? Paul V.

To: Big Bucks who wrote (23226)	8/24/1998 9:35:00 AM
From: Katherine Derbyshire	Read Replies (3) \| Respond to of 70976

I'm a bear, but I think your outlook is probably a little too gloomy. There are fabs other than Dresden under construction, including several 300mm pilots. Despite the pain and suffering in the memory and microprocessor markets, the communication and networking people are still doing pretty well for themselves, and have reasonably high fab utilization. And while no one wants to build the last 200mm fab, no one wants to be caught short without the capacity they need, either. I also think you underestimate the costs (and resulting revenue) of these technology upgrades. Switching to copper, low-k dielectrics, and DUV requires replacing nearly all of the equipment in the fab, plus significant changes in the facility infrastructure itself. At that point it probably becomes more cost effective to just build a new fab. In your scenario, essentially no new capacity would come online until 2002-2003 at the earliest. Short of a global economic collapse, I think that's an unduly pessimistic outlook. I see designers taking advantage of all this excess capacity to design silicon into more things than ever before. I'm sticking by my prediction that things will start to pick up in mid-1999. Katherine