Lam Research (LRCX, NASDAQ): To the Insiders Message Board

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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders

LRCX 142.62

+2.2%

Nov 21 9:30 AM EST

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To: Jong Hyun Yoo who wrote (3121)	7/26/1999 1:26:00 PM
From: FLSTF97	Read Replies (1) of 5867

For those interested, AMD ordered 3 Teres (-es? what is the plural of Teres anyway.) Not sure if this includes the eval tool or not. I would like to interject some element of caution in the euphoria about Lam. I agree that current management is vastly superior to the previous crew. They understand how to monitor and run a company and have performed well. That not withstanding, they still have only 2 product lines: etch and clean. Over the last few years they have given market share in etch to Tel and AMAT. Both of these are tenacious competitors and Lam will struggle to regain market share. Barring a breakthrough technology (like TCP 7 years ago),they will probably only gain share by accepting low margin orders. Anybody ever hear a customer say anything good about Lam/ Ontrak cleaners (excepting of course that they do function)? There is a strong undercurrent of resentment in the customer community relative to the Ontraks. Customer are feed up with Lam's new found arrogance (a la AMAT)and what they conceive as price gouging. Frankly, I congratulate Lam on its success in pricing to market for the cleaners. I'm sure that in the old days they would not have pulled it off. The cautionary element here is that everybody is just waiting for alternatives. AMAT has announced theirs. Rumor says it is significantly less expensive. I expect others to be announced early next year. These firms will find receptive customers. Hence maybe Ontrak will relinquish margin to hold market share. In my opinion, these bode ill for gross profits. Perhaps higher unit sales can offset the margin loss, but it will be a battle. At this point the CMP is a non issue. Peter Wolters has sold many more tools and they get grouped into the other category in market share. Just for the record, I've made lots of money on Lam in the past. My record was a 8 bagger over about 4 years. I no longer hold any Lam nor am I short. I think there is indeed upside potential, but at the current pricing and considering the above, I personally don't like the risk.

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