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To: GuinnessGuy who wrote (22135)	5/30/1999 10:11:00 PM
From: Ian@SI	Respond to of 25960

Craig, The AMAT conference call URL may still be available through their IR page at their web site. Zeev, Thanks for the offer of a soap box. As if that was ever needed. ;-) From the conference call, Morgan indicated that the Supply chain had been optimized such that their backlog target was now in the order fo about 3-4 months, that this would be sufficient to keep the factory going at maximum efficiency. It's quite conceivable that AMAT's suppliers didn't react quickly enough to AMAT's improved business processes and now find themselves with inventory that AMAT isn't willing to take for the simple reason that AMAT is no longer acting as a warehouse for its suppliers, or doing so to a much lesser degree. Craig, What parts does your friend's company supply to AMAT? Essentially, the only scenario that I can imagine that might be consistent with the info provided in the conference calls (not just AMAT's), and all the fab announcements might go something like this: TSMC announces its next fab will be a $2B 300mm job started in 2000 with first silicon scheduled for 2001. Mosel Vitelic[name spelling?} announces a $2.5B(probably Cdn $) 300mm fab probably located in Canada with first silicon also scheduled for 2001. Nobody wants to build the last 200mm fab. Every leading chip maker needs to ante up for the 300mm hand if they intend to stay in the game. I could see several chipmakers re-evaluating whether they really want to enhance, add to or build more 200mm capacity during the next year; or do they just send overflow to foundries while they get their own 300mm capacity in place. Should be interesting while we find out what's really going on. Ian.