Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 157.41

-2.2%

Oct 31 3:59 PM EST

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To: Sam Citron who wrote (10834)	5/8/2004 12:01:28 PM
From: Cary Salsberg	Read Replies (2) of 10921

1. The trough bottom has been 2 times book for AMAT, so AMAT is not nearly as cheap as NVLS on that basis. I still favor them because the industry is at the beginning of an up cycle and AMAT is in the best position to outperform the industry. 2. Losing in copper, specifically. I stated that they were gaining share from AMAT in PVD and will be in CMP. In each of these cases, the tool losing share has had a huge market share, 80% or more. 3. Customers want two sources for tools because that gives them pricing power. It is very difficult to get out of AMAT's way. NVLS has been very adept at finding empty niches, but these have been subtle variations, not different technology or applications, and AMAT adjusts and competes. These guys have been doing this too long to hurt themselves with price competition. They are tough competitors and price is a place to compete, but they both understand that total cost of ownership and productivity enhancements are more important to customers than the initial price tag. 4. NVLS innovation has created industry leading tools for a long time. AMAT closes gaps and leads in other areas, but AMAT dosn't achieve leadership in areas NVLS led. Therefore, there are former market leading, trailing edge tools that China can buy from NVLS. I think that NVLS is less interested in selling trailing edge tools than AMAT is. How this affects NVLS's position in China is probably a function of how far behind China is. 5. NVLS is not an attractive acquisition candidate. Renoir and Monet were contemporaries. Would it have been beneficial for one to buy the other so that the world would have only Monet or only Renoir but not both?

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