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

To: Proud_Infidel who wrote (23397)	8/27/1998 9:28:00 AM
From: Katherine Derbyshire	Respond to of 70976

>> I stand corrected. But what do you think the chances are that my statement will be proven true, looking at AMAT's track record and the time/money they now have with this downturn?<< It is very difficult for any company to obsolete its own product line. For example, GE independently discovered the transistor at about the same time that AT&T did, but handed it to the vacuum tube division for development, where it died. IBM ignored the PC concept for years, because mainframes were their bread and butter. Microsoft's discovery of the Internet came very late, and it's a tribute to their marketing muscle that they were able to come back as strong as they have. Similar cultural difficulties are probably at least part of the reason why AMAT is not already leading in copper and low-k--and your statement is not currently true. If they recognize the problem and take aggressive action to fix it, as Microsoft did, they certainly have the ability to take these new markets by storm. If they fail to recognize the problem, as IBM did, they will have a rough road ahead. My recent conversations with AMAT have not convinced me that they are attacking copper electroplating head on. Instead, they seem to be concentrating on alternatives that would make copper electroplating unnecessary, notably copper etch. They haven't disclosed enough of the underlying science for me to judge whether they're on the right track or not. However, the combination of high valuation relative to the sector and questions about their copper strategy is why, if it were my money, I might put it somewhere else. The importance of all this depends on your horizon, too. The vast majority of chips still use aluminum wiring, and will for several years. More aluminum-based fabs will be built, and it will be several years before the number of copper fabs exceeds the number of aluminum fabs. Are you buying this company for the next 6 months, the next 2-3 years, or the next decade? Katherine