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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (4033)	3/21/1999 8:57:00 PM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 15132

Intel and 300mm You won't find this anywhere on SI <g>. Semi Equipment Investors will recall the recent hoopla over 300mm transition which shot stocks like PRIA beyond the realm of reasonable valuation. Here is a technical article from INTC which may have fueled that speculation. developer.intel.com Excerpt: "The overall industry slowdown has reached historic proportions, and the lack of a startup date has made management of the suppliers more difficult than usual, but not impossible. We have weathered the dog days of summer 1998 when layoffs in the equipment industry became routine, when the world's largest supplier withdrew from I300I undermining I300I's importance and seeming to threaten it with extinction, when at SEMICON West senior managers from various sides met but seemed near fisticuffs, when banner headlines in the San Francisco Bay area papers announced the death of 300mm, when every pundit, no matter how small, offered their opinion on the demerits of the industry transition, and when our own selection teams declined to fulfill program commitments because they felt management was itself not committed to continuing the program. Ignoring all the negativity, we are focussing on the critical task of getting the data on tool production worthiness, by working extensively with I300I, with suppliers, and with key groups at Intel. As we enter the last quarter of 1998, we are vigorously exercising a process to review the teams' equipment data tool-by-tool, anticipating the Third Risk Assessment before year's end. As of this writing, we expect that approximately 80% of the required tools will be ready for selection and a January 2000 startup. As for the remaining 20% of the tools, there are no known showstoppers; they will just need to be managed carefully. Overcapacity is driving manufacturers to extend the useful life of 200mm equipment where ever possible. The 200mm era, in the sense of new construction of 200mm lines by the major manufacturers, is effectively over. The next big opportunity for the suppliers is 300mm. The forecasted productivity of the 300mm equipment looks very good, appearing to come close to capital productivity targets, as shown with historical perspective in Figure 7. If the forecasts are borne out in practice, then 300mm will seem a much more attractive alternative to using 200mm fabs, even those where the equipment set is largely depreciated. When the realization of this counterintuitive result sinks in, as it has here, the industry will make the transition much more rapidly than it did when it went to 200mm10. The first year in which this will have a big impact on suppliers' revenue is 2000, and the first year it will have an impact on manufacturers' cost is 2002, possibly as late as 2003. This impact, as measured by die cost reduction, will be twice as large as that of any wafer size conversion in our short history. The two lessons we should take away from this are that such transitions should be planned as an industry and that wafer size should increase by at least 50%."

To: Justa Werkenstiff who wrote (4033)	3/21/1999 9:31:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 15132

Market Risk This presents a dilemma. If one believes in regression to the mean based upon history, either the larger market catches up to the nifties or the the nifties fall back to the overall market. I believe the latter scenario is more likely but the question is when this will occur IMO. Tough call. Market in short term is unpredictable. If one does not believe the latter scenario will happen anytime soon or does not believe in it at all, one would continue to invest and trade for fear of losing out on profit opportunities. I too tend to believe the latter scenario as well. And yes the call is a tough one. I tend to believe with interest rate increases on hold in the near term there will be opportunities to invest and trade. The question that is always present is: when is the time appropriate to take profits and leave the market to sidestep a bear market? IMO, when Greenspan warns the market that he may raise rates as a prelude to an increase in rates it will be too late. This is the market risk those with substantial amounts of money in the market must face. IMO, it is better to disengage earlier as opposed to later and leave the last dime on the table for others to fight over. As to when the disengagement should take place...I am at a loss. It will be a combination of an educated guess and good luck.