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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: F. Lynn who wrote (3437)	10/7/1998 2:52:00 PM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 4634

There's another thing to remember, and that is that different companies make products which fit into different pieces of the manufacturing process. For example, PRIA and BRKS make automation equipment -- the equipment which moves wafers around in the fabs. This equipment does not need to be upgraded every time the fab is upgraded, usually it only happens when you change wafer size or change the process dramatically enough to require a more complex movement scheme on the production line. Other than that, you only buy the stuff when you build new fabs. Companies like AMAT and NVLS sell equipment which is actually used to process the wafers. Much of that equipment needs to be upgraded every time you change the process, regardless of wafer size. The current round of upgrades is occurring without much new construction and with no conversion from 200mm to 300mm wafers. AMAT and others have been pushing for 300mm for a while, but nobody can justify the cost yet. IMO PRIA and BRKS are valued far below AMAT because they need a much bigger series of events (new construction, upgrade to 300mm) in order to see a sharp upturn in orders. Which is just another reason I think the small players will turn around LAST. It doesn't mean they won't move far, but you will almost certainly wait longer. And you'll need to be a lot more careful about getting the right sell point. Accummulating AMAT and NVLS now, others possibly later... mg