Mr. Pang: Relative to my expectations, the 2007 year was in line, and I think it was much better than what the consensus view was. We did have some spending growth, and wafer fab equipment actually grew ahead of the overall capital spending in 2007.
TWST: Why? What drove that?
Mr. Pang: There was maybe a little too much euphoria on the memory side, so
overall memory capital spending accounted for a little more than two-thirds of
all other spending and it was clear from the price erosion for both DRAM and
NAND that the industry built too much capacity on the memory side. It's memory
and specifically DRAM that drove equipment spending in 2007.
TWST: How did the industry come out of the year from an inventory perspective?
Mr. Pang: Inventories were at reasonable levels through the end of the year when
inventories started to build. Semiconductor sales were strong in 3Q07 but the
follow-through in the fourth quarter was not as strong as expected.
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