Your very welcome. A few years ago, I ventured over to the CYMI thread while it was being hyped far more than it is now. I expressed a similar opinion as I do now. It has been a good company, it has good prospects, but it has an upside limited by its market position and risks because of that position.
I want to comment on installed base. The nature of the industry has been that number of lithography tools in full production has grown slowly and the number sold in peak years has also grown slowly. Newer, more productive, more expensive machines replace older ones as the the industry moves along the roadmap. I suspect that CYMI's revenues from installed base laser replacement will grow slowly from here.
Now, I will comment on my list: ALTR, AMAT, ASML, KLAC, LLTC, MXIM, NVLS, XLNX. I have lived in San Jose since 1976 and I have very closely followed Silicon Valley companies since 1990. I tend to buy low and sell high, so my most significant moves have been against the crowd. I have done well moving against the crowd because I follow a maxim which says, "If I buy stock in a company and the price goes lower and I am not even happier to buy more at the lower price, than I am in the wrong company." I have more confidence in the 8 listed than in any others. I know, and I have said before, that other companies will produce higher returns, but these are the most reliable. They are also blessed with volatility and strong growth potential derived from technology.
There are certainly larger cap companies than my 8. I contend that semi-equips with smaller caps merit those smaller caps. The semi-equip industry probably has higher barriers to enty than most. Companies in the industry tend to have been around a while and their market cap probably reflects an efficient market. Lets consider CYMI and AMAT. On one of these threads, recently, lithography was credited with 20% of semi-equip revenues. CYMI gets about 80% of 10% of that, or 1.6% of semi-equip revenues. AMAT has about 25% of semi-equip revenues. Of the 80% non-lithography revenue, it gets about 30%. AMAT is working to move up to 50% or 40% of semi-equip revenues. Semi-equip revenues, including lithography will grow at an average annual rate of 15-20%. AMAT isn't likely to lose 1/3 to 1/2 of its revenue if a competitor favored by 2/3 of its customers finally gets its act in order. In fact, it is inconceivable to most how AMAT would possibly lose 1/3 to 1/2 of its revenues to a competitor.
Again, we all have fire insurance on our houses, but we don't expect a fire. We are just dealing with risk. Leaving CYMI off my list is my way of dealing with its risk. I don't expect it to burn. |
