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Politics : Formerly About Applied Materials
AMAT 249.89+3.1%Nov 26 3:59 PM EST
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To: Duker who wrote (31713)8/3/1999 4:35:00 PM
From: Gottfried  Read Replies (1) of 70976
 
Duker, Intel is about to select a PVD tool.

o The selection of the copper barrier/seed PVD tool of record at Intel is
imminent. The contenders are Applied Materials and Novellus Systems. We
think that the odds are better than 50-50 that Novellus will win this bake-off
or at least split the business.

o PVD is estimated to be a $1.2 billion market in 1999. AMAT dominates the
segment with >80% market share. AMAT's Endura PVD tool is one of the most
successful products in the company's history, perhaps the industry's history,
in our view.

o A win at Intel by Novellus would be big news because it would go a long
way to supporting street estimates that are now moving north of $3.00 in CY'00.
In our own model we estimate that Novellus will sell about $30 million in PVD
in CY'99 and $100 million in CY'00.

o Novellus System remains one of the least expensive names in the group.
The company has a deep pipeline of new products above and beyond the new PVD
system. We are re-iterating our $100 price objective.

Fundamental Highlights:
o Intel is abandoning its "copy exact" manufacturing strategy. Where ever
possible the manufacturing group is trying to qualify two vendors in order to
win the best pricing. A second PVD vendor at Intel would likely knock as much
as $1million off the $3-5 million average selling price of the Applied
Materials system. We think that is reason enough for Intel to qualify Novellus
assuming their tool is competitive.

from a recent ML report.

Gottfried
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