Zeev's Turnips Patch-No Politics (ZEEV)

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ml,

I'm just using some simple logic here:
Premise 1: AMAT is cyclical;
Premise 2: Things absolutely terrible right now;
What do you think is the next logicical step in the progression?
A. things get better, or
B. AMAT breaks its cyclicity to the down side.

IMHO, believing in (B) above would be as wrong as believing AMAT would break its cyclicity to the up side two and a half years ago. Lay-offs are a late cycle behavior as well.

The cyclicity of AMAT is the result of Moor's Law itself, processor doubling every 18 months means feature size (size of MOSFET juncture transistor on the chip) shrinks by about 30% over the same time period. The previous article's repeated reference to old fab facilities having low utilization rate shows how little the author knows about the industry. Who would want to feed silicon wafers into a 0.25u fab that makes Petium II class processors that sells for peanuts when the same slice of wafer can be fed into a 0.13u fab that makes four times as many processors running five times as fast and sells for 10 times as much money per chip, resulting in a 40-fold return on the wafer? Low utilization rate could be an indication that the average fab is long in the tooth and ready to be phased out. That means money for AMAT and the like.