The Contrary Case To begin with, although memory plants do make up a large part of the total semiconductor capital equipment expenditure, lower prices in DRAM do not dowse demand across the board for every company above. Fitzgerald gives a nod to with his mention of Intel. Secondly, increased price competition increases the need for greater throughput and yield. Throughput is a fancy industry term for efficiency, and is a measure of how many chips can be processed in a fixed amount of time. Automated processing equipment is used to increase throughput, decreasing costs by removing the time factor from the manufacturing process.
Yield is a term that describes how many chips can be garnered from one wafer of silicon.
Increased yields means lower costs and fewer reject chips to get tossed out by the testers. It's as though Micron and Intel set the tone for everybody. I got the opportunity to speak to Rick Whittington of SoundView Financial as well today, to get his input on the cuts by Fitzgerald and Hodess. I've been shaking my head at the rally. The companies will inevitably tell the tale, but they are all saying different things.