Marie, (Off-Thread, but so is life)
Since you brought Emcore to my attention, I have noticed that it reported nice quarterly earnings today, with sales up 104% yr over yr and 50% sequentially as they are now selling wafers and not merely the MOCVD equipment to produce them. So far they seem to have accomplished this without stepping on the toes of its customers. I'm quite curious about this company since, as you noted, it appears to be the only public company in the compound semiconductor equipment industry.
I have several questions about EMKR and the compound semiconductor equipment industry:
(1) How immune is this industry from invasion from the semiconductor CVD industry? Are the processes sufficiently different that it will keep AMAT and its progeny out of this market? Any general thoughts about industry structure and barriers to entry would be most appreciated. Would in fact this industry be viewed as attractive by participants in the semi-equipment industry? Are they making inroads?
(2) Can this industry be viewed as where the semiconductor equipment industry was perhaps 20 years ago? That is, of course, a broad statement but any comparisons would be appreciated.
(3) How does EMKR stack up against its competitors in terms of market share, profitability, etc? Who are the MBE equipment suppliers? Are any public yet? What is the total size of the MBE equipment market and the MOCVD equipment market and what are their relative growth rates?
(4) I am a bit taken aback by EMKR's extremely high debt to equity ratio and by the fact that its CEO is a merchant banker rather than an engineer. Do you see any red flags there as well?
(5) Today's earnings seem to confirm that the company is executing well on their strategy to sell wafers and not just equipment. Do you feel that this is a viable longterm strategy and that EMKR can do both without eventually competing with its customers?
(6) Any anecdotal evidence regarding how EMKR's equipment is perceived in the marketplace?
Thanks in advance for your response. It's wonderful to have your knowledgable participation on this thread.
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