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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (7904)	6/5/1999 3:58:00 PM
From: Ian@SI	Respond to of 10921

Zeev, I hold a couple beliefs which make me feel the Chip Equipment makers are a little different than other equipment makers supplying other industry sectors. 1. Rate of technology obsolescence. Rolls Royce still builds cars by hand and while not consistently profitable carries enough prestige that it's being allowed to survive. A DRAM maker using .35µ technology today wouldn't last the year. 2. Rate of productivity improvement. There's almost always a compelling economic case to upgrade to the latest and greatest equipment which, IMO, is causing the extremes in over and under capacity as everybody rushes in to take advantage of the same economics. And one very encouraging observation. 2 300mm fab announcements with 1st silicon scheduled for about mid 2001. So I suspect that a 1 1/2 year holding time will be very rewarding. But I'm more than willing to hold for 3+ years if need be. 300mm will come sooner or later. and it will be very nice when it does. My margin is minimal; and I'll probably sell some Dow stocks to eliminate it altogether. So I just don't see the cyclical nature of this business changing much until the rate of technological / productivity change slows substantially. JMHO, Ian.

To: Zeev Hed who wrote (7904)	6/6/1999 3:35:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 10921

Zeev, My misgiving are rooted in the fact that in the last cycle, the chip makers gorged themselves and had capex that run above 30% of annual sales. In the latter part of '98, this number(capex vs total chip sales) came down to the high teens, an historic low for the sector if I am not mistaken. The equipment that was purchased during the last "upturn" in '97 is not too far from being obsoleted also. I agree with Ian's assessment of the sector which is why I will not part with my shares even if we do get temporarily overextended. There is too much upside that cannot be seen with the internet. You must believe in the sector to hold on however, the ride up will surely be bumpy. BK

To: Zeev Hed who wrote (7904)	6/6/1999 4:36:00 PM
From: Ian@SI	Respond to of 10921

Zeev, Your misgivings are the source of the strength of my belief. Like the TA folk, I believe that human nature remains about the same over time. When businessmen see a good business opportunity, they take it. What frequently happens is that several see the same opportunity and most go for it. By the time they ready to produce revenue, that very fact reduces or removes the opportunity. But they're doomed to carry on regardless. Sort of like the film, "Groundhog Day". Except, hopefully for our sakes, they'll never get it right. ;-) JMHO, Ian.