Should ETN buy VSEA?
Theodore O'Neill, Principal with Needham & Company, examined the outlook for Semiconductor Equipment in this timely and deeply informative 15,200 word interview from The Wall Street Transcript (212/952-7433) or twst.com
On consolidation, O'Neill states, "Well, it's very expensive to do it right now, and if the industry was really inclined toward doing it; Teradyne would have bought LTX Corporation (Nasdaq: LTXX) when it was selling for less than $1.00 back at the bottom of the downturn (Now around $45). On the other hand, the rise of the foundry model and the fabless model has really changed the selling equation."
ETN is planning to take its Semiconductor Equipment Business Public.
VSEA appears to be in the in the same business -- Ion Implantation Equipment.
Even if ETN is not able to buy VSEA, this information looks good for ETN's Semiconductor Equipment Business:
For the 13 weeks ended 12/31/99, revenues totaled $109.8 million, up from $47.4 million. Net income totaled $5.3 million vs. a loss of $6.7 million. Revenues benefited from the recovery of the semiconductor segment.http://biz.yahoo.com/p/v/vsea.html
In April 1999 VSEA's stock price was around $9. About one year later VSEA closed around $63.
"I would also look for some small cap companies that are as yet unnoticed or not fully covered." Maire continues, "One company that is not small cap but more mid-cap is Varian Semiconductor (Nasdaq: VSEA - news), which was a spinout from a larger company just about a year ago and is now a pure play in the semiconductor equipment space."
biz.yahoo.com
Business Summary
Varian Semiconductor Equipment Associates, Inc. (VSEA) designs, manufactures, markets and services semiconductor processing equipment used in the fabrication of integrated circuits. VSEA is a leading supplier of ion implantation systems, key pieces of capital equipment used to manufacture semiconductor chips. VSEA equipment is used by virtually every major semiconductor manufacturer in the United States, Europe, Japan, Korea, and throughout the Asia Pacific region. Its support network offers chip producers around-the-clock, worldwide service, training and process support. The Company designs and manufactures a broad range of implant tools, using data-driven quality processes to produce reliable systems and provide total support to its customers. VSEA's products are used for ion implantation in semiconductor manufacturing.
biz.yahoo.com
Ion Implantation is just a part (a big part) of ETN's Semiconductor Equipment Business. |
