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To: LittleMax who wrote (724)	11/15/1998 4:43:00 PM
From: Rob-Chemist	Read Replies (1) \| Respond to of 955

I must say that I have really enjoyed the conversation on this thread, and just wanted to add my 2¢ worth. I agree with you that when ASPs, cash flows, etc. are low, as they are now, companies will not be going to 0.25µm rules for capacity expansion. Rather, I think that the move to 0.25µM is being driven by the huge performance enhancement provided by 0.25µM as compared to 0.35µM - faster communication related chips, processors, etc. Thus, for example, the first company that provides a given communication chip with 0.25µM features will be able to charge a large premium over the existing 0.35µM chip due to the enhance speed and/or features that the 0.25µM design will have and, therefore, will make large amounts of money until competitors also provide chips at 0.25µM.

To: LittleMax who wrote (724)	11/15/1998 5:10:00 PM
From: Katherine Derbyshire	Read Replies (2) \| Respond to of 955

>>1. The tenor of your posts suggests that .25 is where we draw the line between MASK and PLAB or DPMI. The following statement is from the MASK FY98 10K, issued earlier this year:<< The tenor of your posts was that MASK is undervalued because it is not perceived as being on the leading edge, but that 0.25 micron is a long distance away and MASK will be caught up in time. I disagreed (and continue to disagree) with your statement that 0.25 micron is a long way away. I take no position on MASK's preparedness or lack thereof. >>"I'd actually put it a different way: It's hard to conceive of a general industry rebound without a rebound in Asia."<< Since you took issue with this statement, let me be more precise: It's hard to conceive of a semiconductor equipment industry rebound without increased demand for chips from Asian consumers, regardless of who supplies those chips. >> 2) when overall demand is down, ASPs are down, cash flow is down, equity values are down, etc., you focus on capacity utilization, debt service coverage, overall production efficiency, etc., not capacity expansion.<< I repeat, 0.25 micron devices are faster and offer significantly higher performance, thereby allowing companies to increase their ASP for those chips. If you would like me to defer to your economic expertise, please listen when I make technology-oriented comments. Mask shops have been significantly less brutalized than equipment companies in the current downturn. Note that they are still reporting profits and earnings growth, while the equipment companies are reporting losses and massive layoffs. According to executives at mask shops, increased 0.25 micron demand is one reason for this. Stepper vendors are less severely affected than other front-end equipment companies, and give 0.25 micron technology part of the credit. These are not my opinions, these are statements made to me personally or in my presence by officials of the affected companies and by market analysts. I am perfectly willing to concede that rapid shrinks are not economically wise. But, wise or not, they are occurring. An INVESTOR in semiconductor companies ignores the rapid technology transitions characteristic of the industry at his peril. Katherine

To: LittleMax who wrote (724)	11/22/1998 10:34:00 PM
From: Carl R.	Respond to of 955

Little Max, while the Alta is a fine machine, it is not leading edge. Note that ETEC sold several Mebus machines in the most recent quarter: techstocks.com Even with the purchase of the Alta machines, MASK is still behind the technology curve, but that is obviously their strategy. The leading edge is quickly moving beyond .25u. Memory makers are moving to .21/.22u as fast as possible. Micron for example says that most wafer starts are at .21u already, and that most will be at .18u by next year. As an aside, I have never had any position in any of the mask makers. However the fact that shrinks are a reasonable step for semi makers to increase both performance and volume while decreasing cost leads me the believe that along with stepper makers, mask makers will be among the earliest beneficiaries of a recovery. Carl