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

To: Katherine Derbyshire who wrote (23236)	8/24/1998 10:06:00 AM
From: Paul V.	Respond to of 70976

Katherine, >I'm sticking by my prediction that things will start to pick up in mid-1999.< Taking your prediction into consideration, Big Bucks estimated BTB lows, my opinion that Wall Street looks 6-9 months ahead, and the DW TA charts which runs the approx. high low and low high cycle of 12 months, IMO, we will probably see price lows within the next two/three months. When we will actually reach the lows no one know. We will just have to be watching. It appears in looking at the charts that AMAT has the tendency to run up during the Fall and Spring. Just my opinion. Paul V.

To: Katherine Derbyshire who wrote (23236)	8/24/1998 11:16:00 AM
From: MikeGolden	Respond to of 70976

As an industry participant since 1968 and a true believer I read all of the doom and gloom posts and have a good laugh. Thanks for providing some real insight into the current situation. I appreciate the viewpoint of those who want to constantly trade AMAT and the others but on a long term basis simply accumulating and holding on for several years IMO will most likely beat any other strategy without any of the short term headaches.

To: Katherine Derbyshire who wrote (23236)	8/24/1998 2:51:00 PM
From: Big Bucks	Read Replies (2) \| Respond to of 70976

Katherine, You said: " 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 think maybe you missed my point, yes there will be upgrades but they will be sporatic and drawn out over the next 2+ years. Don't expect to see any huge short term bulk orders of $100M for a single fab which is typical for a new fab. Fabs still need to produce revenue even while they are upgrading to the next technology level, this is typically done by replacing 1 or 2 pieces of equipment at a time and bringing it online and qualifying it to the new specifications. This qualification takes time to verify performance and fine tune system operation and insure manufacturability at the improved performance level. As the new equipment and process is brought online it is typically reserved for the new product thus making it unavailable for the older products to minimize potential issues of cross contamination or yield contamination. FWIW, pilot lines are typically very small R&D facilities that are used to identify equipment deficiencies, enhance productivity, and improve chip/equipment performance and yields. This is where future equipment buys are decided based on various vendor tool evaluations in the pilot line. I would be surprised to hear of another new 200mm fab being built, since it would/could be competing in 2+ years with 300mm fabs that will use economics of scale to make 200mm competition unprofitable except in niche specialty markets. As for a potential world economic collapse, maybe, maybe not, but regardless there just isn't any discretionary capital available at this time to warrant new fab construction, especially in a surplus capacity market as exists today. I stand by my previous commentary until there are more positives to support a change in semi industry dynamics/economics. Regards, BB