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

To: Ingenious who wrote (23410)	8/27/1998 6:20:00 AM
From: Duker	Read Replies (1) \| Respond to of 70976

Leland, Interesting. Walk me through the death of LRCX...The number of quarters this downturn must last for the company to destroy its balance sheet...The B/E level you see as doable...cash burn...etc. Also, if LRCX is a smaller player, who (aside from AMAT & TEL) are the bigger ones? --Duker

To: Ingenious who wrote (23410)	8/27/1998 8:56:00 AM
From: akidron	Read Replies (2) \| Respond to of 70976

When is everything not quite as it seems. The legend is AMAT has cash, thus AMAT is strong, but is that the reality. AMAT has committed a huge portion of available recources to a fixed cost expansion, and is now clipping away at variable costs to achieve balance. The problem is that its not working fast enough and that eventually some of the assets will have to be mothballed or abandoned. Quite how desperate the plight is, is seen from the fact that AMAT, having poured huge $$$$ into hiring is now firing precious people. My guess is tha we are nowhere near botton, for AMAT and that bottom ill be signaled by a Russia type run on the banks in Japan and Hong Kong and a $25O million charge against Physical plant and machinerey. Nor do I think that AMAT is in the strongest position, re its competitors. NVLS shrunk its cost base earlier, was less expansion comitted, as its big bet in copper wasn't quite ready for market, so whereas AMAT has to write of massive amounts of plant and labor, NVLS only has R&D and a small amount of labour to flush. This is of course a over-simplification, and a generalization. but in general I expect AMAT to approach 96' lows, as the market as a whole declines.