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

To: Big Bucks who wrote (24147)	9/11/1998 4:39:00 PM
From: Duker	Read Replies (1) \| Respond to of 70976

<<The only reason that INTC is showing profitability is cutbacks and depreciation of capital assets.>> I guess I'll call you on that. Please explain what you mean, because that is not the way I read it. Flat to slightly up revenues increasing to 8-10%+ revenue growth has nothing to do with cutbacks or "depreciation of capital assets." Moreover, the Gross Margin guidance includes some one time charges that will act to depress Gross Profits (some say by up to 200 bpts. ... which would be roughly $260mm in one time charges...definitely in the realm given the asset base). I am certainly not saying that everything is rosy, but you can not dismiss this as accounting gimmickry. --Duker

To: Big Bucks who wrote (24147)	9/11/1998 8:12:00 PM
From: Tony Viola	Read Replies (1) \| Respond to of 70976

BB, OK, agree to disagree? Tony

To: Big Bucks who wrote (24147)	9/12/1998 1:37:00 AM
From: Jacob Snyder	Read Replies (2) \| Respond to of 70976

Re: Intel effect? INTC bottomed in January 1996, and the semi-equips bottomed 6 months later. INTC bottomed in June 1998, and 6 months later is.......very close, if you're a long-term investor. INTC has been saying all year that the second half of 1998 would be better than the first half. They have a track record of being credible. They are resuming profit growth, through higher sales and higher margins. This is quite an achievement, in the face of flat profits for the economy as a whole. Profit growth resumption for semis is one of my bottom indicators. In DRAMs, I think we've hit bottom, as far as ASPs and overcapacity. ASPs can't go any lower, because they are already at the variable cost of production. Overcapacity has hit bottom; die-shrinks are being balanced by permanent fab closures. How long does it take the equipment in a new, state-of-the-art fab to become obsolete? This is the longest length of time a semi-equip downturn can last. No matter how badly semi companies overestimate demand and thereby create overcapacity, the equipment becomes junk in, what, 3 or 4 years?