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

To: Math Junkie who wrote (29762)	4/28/1999 4:26:00 PM
From: Katherine Derbyshire	Read Replies (3) \| Respond to of 70976

>> Total chip revenue is important, to be sure, but the revenue is not evenly divided among chip makers. Those that have the money for expansion spend it, and those that don't, won't. During the recent downturn, capital spending by Intel held up well. It is the waves of DRAM expansion and contraction that have been driving the big swings in the equipment business, and DRAM is a high volume and (I presume) low margin business.<< Yes, precisely. DRAM margins are very very low (approaching zero or less in the recent crunch) and very very high volume. The high volume means DRAMs consume lots of equipment when the market is expanding, while the commodity pricing means that they are very prone to capacity-driven booms and busts. Much more so than the technology-driven sectors. Katherine