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

To: Katherine Derbyshire who wrote (24559)	9/23/1998 2:00:00 PM
From: Ramsey Su	Respond to of 70976

In the current situation, the great unknown seems to be chip demand. Without a good estimate for that (impossible right now due to macroeconomic uncertainty), estimates of all the other things are just guesses. Katherine, I am surprised and disappointed. Katherine without an answer? I thought for sure you would give me a link to one of the articles you have written, detailing the trend. Ramsey :)

To: Katherine Derbyshire who wrote (24559)	9/23/1998 2:05:00 PM
From: ricky	Read Replies (1) \| Respond to of 70976

Now is the time to buy AMAT. Chip demand will turn to the upside in the near future. Ricky

To: Katherine Derbyshire who wrote (24559)	9/23/1998 5:24:00 PM
From: Duker	Read Replies (2) \| Respond to of 70976

<<Someone once described it to me as sort of like cracking a whip. The handle (the chip companies) moves just a little, but the end (suppliers to the equipment companies) moves a lot. The fundamental problem is that a fab is a huge expense, and it's hard to buy a fraction of one. So all the chip companies delay as long as they can, then splurge to satisfy their pent up demand. Meanwhile, unmet demand drives up prices, so people overbuild to try to capture some of those profits, creating a glut.>> Someone once described the relationship between chip companies and chip equipment companies as similar to the relationship between drug addicts and drug dealers. Highly profitable, with its share of risks...but the users will always come back as soon as they can get the money. Not very PC, but an interesting analogy just the same. --Duker

To: Katherine Derbyshire who wrote (24559)	9/23/1998 5:53:00 PM
From: Ramsey Su	Read Replies (3) \| Respond to of 70976

Katherine, trying to play with numbers again. Let us assume that AMAT reached their goal of $10b rev a few years from now. Let us further assume that AMAT corners 20% of the semi eq sector. That would imply a $50b industry. If an average fab is $2B, that means 25 fab per year. OK, not all orders go into a new fab, how about just half, or 12.5 new fabs per year. How many years at the pace of 12.5 fabs/yr would we have the mother of all gluts again? Ramsey