according to WFN...looks interesting.
Numerical Technologies NMTC 5.5 million $11-$13 CS First Boston
Subwavelength semiconductor design technologies
This company is poised on the leading edge of two semiconductor trends. First, demand in this highly cyclic sector is on the upswing. Demand is growing at an estimated 17.4% rate, with revenues expected to grow from $144 billion (?99) to $233 billion (?02). Secondly, demand for smaller, portable, and energy efficient chips is growing. Since 1980 chip feature size has plummeted from 0.3 microns to 0.18 microns. The proliferation of portable devices (e.g., lap tops, palm tops, PDA?s), cell phones, and high performance communications has driven demand for smaller, less power consuming chips. The miniturization has required considerable capital investment with new fabrication plants required for each generation change.
The 0.18 micron level presents a formidable technological barrier, much like the old sound barrier. At sizes less than 0.18 micron, chip features are smaller than the wavelength of light. Consequently, they are not visible.
Numerical Technologies has broken this chip ?sound barrier?. Using it?s patented technology and software, it allows firms to build chips with features smaller than the 0.18 micron barrier. Equally important, the technology does not require additional capital investment in new fabrication plants or manufacturing equipment. The firm?s technology has already been demonstrated by Motorola, which has produced 0.10 micron features, and Lucent Technologies, which has produced 0.12 micron features.
The firm licenses the technology and software to chip designers, photomask makers, equipment makers, and foundries. It has established alliances with such market leaders as Cadence Design, Dupont Photomasks, Photronics, Applied Materials, KLA-Tencor, and several foundries.
The firm emerged from start-up in ?99 with revenues reaching $5.5 million. As expected for a firm in this stage, it is burning cash and will continue to do so into the near future.
This is a breakthrough technology so direct comparables are not available. However, for perspective purposes only, some loosely related comparables include Mentor Graphics, which is trading in the upper half of it?s 52 week range, and controversial Avant!, which is trading in the lower half. Pre-offering demand has been affected by the plunge in Nasdaq and has eroded from previously heavy reports.
This is another highly speculative offering. There are no real fundamentals and this is an emerging sector. The technology is breakthrough, but has not yet been adapted to widespread use. Given the expense of chip production, it?s expected that the adoption will be measured. Consequently, despite the promise, early performance may be weak. This should only be considered as a strategic, longer term offering. Despite the general Nasdaq decline, the semiconductor sector has been somewhat resilient. Consequently, a somewhat favorable initial reception is expected (40+%) followed by long term appreciation.
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