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

To: Paul V. who wrote (26608)	11/23/1998 9:01:00 AM
From: blake_paterson	Read Replies (2) \| Respond to of 70976

Paul: <<This may indicate that around the first/middle part of Aug is the annual time to get out on the up cycle.>> I don't think we can assume that the cycle's periodicity or patterns will remain the same or similar this time. Indeed, I think that we all agree that (so far) this time around has been very different: 1. A significant over-capacity bubble, triggered by greenfield fab construction worldwide (especially in Asia), has been superimposed on the "usual" cycle's peaks and troughs. 2. An Asian capital markets meltdown, followed by recession and depression in most of the semi-equips key markets, has also been superimposed on the cycle. 3. Wall Street jumps in 2 months early (as you have so accurately pointed out), led by Billat, so as to not miss out on the entry at valuation troughs necessary to maximize their gains. So the semi-equip cycle is now having to climb a wall of over-capacity, the likes of which has never been seen before, in addition to significant disruption of the economic, political and business fabric of its key marketplaces. In addition, a deflationary trend is now being experienced in all markets, causing a very significant change in the thought process of the capex decision makers (witness Intel's emphasis on reduction of depreciation expenses during last weeks meeting w/ analysts). Lastly, we don't know how patient this early money is - big variable. There is no doubt that the long term potential looks greater than ever: embedded processors and DSP's and all of their product progeny (ie., smart appliances), sub 1000 computers, etc, etc. But the cycle wavelength may be in for a significant increase, or at least a phase shift may occur. All IMHO, BP