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

To: Fred Levine who wrote (27437)	12/27/1998 8:31:00 PM
From: Fred Levine	Respond to of 70976

From DECEMBER 21 Barrons-- Besides MCI, Segalas has been buying semiconductor-equipment stocks like KLA-Tencor and Applied Materials. "The semiconductor guys are starting to feel better about next year, and when the turn comes, it's going to show up very quickly in their numbers," he says. Semiconductor-equipment makers, like the chipmakers themselves, were hammered this past summer in the Asian financial crisis. The manufacturers cut back on expansion plans and delayed new equipment purchases as Asian demand for their products dried up. As that situation begins to reverse itself, Segalas thinks, both Applied Materials and KLA have better prospects than most people realize. Applied's equipment allows manufacturers to make super-small chips with linewidths of 0.25 microns or smaller. The industry is in the early stages of an upgrade to this 0.25-micron capability, and Applied Materials is the market leader. There's a similar story at KLA, which makes yield-monitoring and process-control systems for semi manufacturers. Segalas admits that these are fairly aggressive picks. After all, even though the stocks have been beaten up, he's hardly buying them off their lows. And any time your analysis of these companies depends on temporary demand for semiconductors, things can get a bit dicey. Nevertheless, he's got the courage of his convictions. And the numbers to back them up. And he's still crazy for managing money after all these years: "I think people that work in this business are privileged." fred