Mason, cheer up dude. On days like today, I find that a good red grape helps. Purists shudder in horror when I drop a couple of ice cubes in a glass of good cabernet, but to hell with them, I occasionally like a good red chilled.
We all got whacked today, and your assessment about the wafer fab industry may be correct, but I think you might want to reassess things in tomorrow's light. The point here is that Cymer is poised to make some good gains in the next year(s), and a decline in chip sales isn't going to slow it down much. See if this reasonong is correct, and shoot holes in where you can. It seems to me that the chip makers have little choice but to tool up for the .25 micron and under chips, regardless of sales of current-spec chips. Any chip maker that doesn't (while the others do) will be left in the future making a product that nobody wants. In fact, the fact that those sales are slowing down may simply mean that the current generation of chips is falling by the wayside. It may even push the ramp-up forward.
It is interesting that you make mention of Carl Johnson holding cash in his portfolio. I just received today's Infrastructure daily note, and he mentions the whacking the whole tech sector received as a result of Intel's earnings release. What was interesting to him, however, is that in the next several years, Intel is going to spend $4.5 billion upgrading their chip production capabilities, and Carl mentioned some of the firms in line to receive some of that money in supplying tools for Intel's upgrade (no everyone, Cymer was not specifically mentioned, but Johnson did mention that the list was just a few of the companies involved.) All of the chip makers carry large cash positions (and virtually no debt) for just this kind of thing.
The point here is that we may have an opportunity to catch a rolling wave. The chip maker's upturn in revenues may be several years away, but the suppliers to the general wafer-fab upgrade, (with your's truly, Cymer, at the heart of it) should profit from the upgrade, not the sale of the chips, and the upgrade is beginning in full force NOW.
Therefore, the big upward move in earnings for these folks should be in the next several years.
Now when the upgrade slows and the chip makers start cranking out the new generation of chips, it may be time for a strategic reallocation of capital in their direction. But for right now, hang on with us for what looks like will be one hell of a nice ride. You have consistently been one of the truly reliable sources of quality information on this thread. Shake off the gloom. ;-)
jess |
