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

To: Gottfried who wrote (26596)	11/21/1998 12:54:00 PM
From: C_Johnson	Read Replies (3) \| Respond to of 70976

Hello Everyone, Gotta be careful with the timing of those phone interviews. :-) I'd like to clarify my position here if possible. A: Wall Street thinks that in 6 to 9 months everything will look better. We do not have any evidence that says that will be the case. In recent days a number of companies have said they see evidence that the industry is bottoming. Hence the rally. No doubt about it, quote activity is up from the recent lows. Quote activity is nice - but it does not mean hard P.O.'s. Perhaps P.O.'s will come later. So, after the interview, positive comments were made and that has made Wall Street more bullish on the sector. We'll have to see how long this will last because there are still a number of fundamental issues to be resolved in the coming quarters. I don't see the recent pop in front end process tool shipments (announced in SEMI's recent Express Report) as definitive evidence of a new upleg. Book-to-bill ratios are useless unless you look at the underlying numbers. As the old saying goes, "the easiest way to get a book-to-bill ratio back over 1.0 is to quit shipping." Although they have a near term affect on investor psychology, I would be careful with the ratios. The bottom we see for '99 is more likely going to benefit those in position to facilitate feature size reductions and the manufacture of high speed logic applications. As most of you know, feature size reductions can take place without the construction of new fabs. For example, there are stories from the front regarding the move by one large manufacturer to retrofit installed lithography tools with 193nm lasers. The same can be said for the production of high speed logic. As far as new fab construction is concerned, it is going to be a while before the industry alleviates the current capacity glut. No one wants to be the last to build and 200mm fab and no one wants to be the first to build a 300mm fab. It will take time for 300mm to build momentum. Yes, there probably will be a few fabs (200mm) built but the level of activity will be a far cry from boomtimes of yesteryear. I suspect suppliers of advanced materials and material delivery systems that bring a COO advantage to an existing facility will also do well in '99. PRI also brings COO advantages to existing facilities - the payback on reticle stockers and automation tools is rather quick. I make no bones about my bullishness on the photomask manufacturers - long term. Near term there are some hurdles to overcome - there is a definite possibility that we will see some weak quarters. At a recent Dataquest/SEMI meeting a forecast was presented predicting the growth rate in photomask related business that exceeded all other areas by a large percentage. CAGR is expected to be better than 60% when measured from '97 to '03. There will also be consolidation. The SpeedFam/IPEC merger is probably the tip of the iceberg. As one member of the Wall Street community told me Friday, "let the games begin!" There are over 2,200 SEMI members - the downturn is viewed by many as an opportunity to develop synergistic partnerships. In some instances this type of activity is dictated by the need to survive. I am not going to speculate on who or when in this forum. We've certainly had a robust rally off the 3rd quarter lows. Everyone who is invested in the sector has probably made, or recovered, some money. It's going to be interesting to watch future stock price movements. Hope this clarifies my position. Regards, Carl INFRASTRUCTURE infras.com

To: Gottfried who wrote (26596)	11/21/1998 11:20:00 PM
From: Paul V.	Respond to of 70976

Gottfried,Quote Q: Everything appeared to be looking better in the semiconductor industry. A: Wall Street thinks that in 6 to 9 months everything will look better. We do not have any evidence that says that will be the case.<i/> All of my data appears to support his interpretation. Does your chart and data analysis support my positive analysis? It is scary to see the positive TA data-just to good. When we get a breakout to $40, IMO, we will be off to the races again in Tito's stairstep scenario. My only concern is that we started our rebound two months sooner this year than what we did in 1996. Does this mean that we will top out in in price in June '99 rather than August that your chart indicates we have done in the price. Just my $.02. Paul V.