Here are my notes from the conference call, organized into categories for easy reading. I think it was a great call!!
Orders:
-- Emphasized "significant orders" since the end of Q3. (Could this be Intel?)
-- Customers want to speed up deliveries for die shrinkage of 16M and 64M DRAM.
Competitive front:
-- There is no third party verified data on the performance of CYMI vs. competitors' lasers.
-- Lambda is the closest known technology competitor (known because it publishes technical papers)
-- Komatsu is a "black hole of technical information."
-- Both competitors have claimed for years (almost 10 years) that their lasers are better than CYMI's.
-- CYMI's lasers are almost always more expensive that the competitors [It was left unsaid that if the competitors' lasers are cheaper and better than CYMI's, then why does CYMI have 90% market share?]
-- Third competitor (I couldn't catch the name) has a solid state laser. It is a YAG laser with a frequency multiplier. It has a power problem. It also has a light coherency problem, because it must use multiple laser sources.
-- "September problem" -- CYMI cannot comment about some things in detail because of confidentiality agreements it has with customers. Likewise, customers have confidentiality obligations to CYMI.
Margins:
-- Lower margins in Q3 because: (1) one-time cost for moving to new factory; (2) continuous improvement program (CIP) reserves; and (3) inefficiencies related to shifting production in September.
-- At this point, both CYMI and its customers have better knowledge of how to build and use CYMI lasers.
-- CYMI expects to see improvement in gross margins beginning in 1Q98. Possible improvement in 4Q97, but hesitant to commit to that because CYMI is still adjusting to the new factory.
Future sales/shipments:
-- I think that Dataquest forecast a market for 500 DUV lasers in 1998. CYMI said that Dataquest's numbers are accurate, and that one of its customers said that demand in 1998 will be 700 lasers, and that "industry" would not be able to meet that demand.
-- By the end of 3Q97, about 160 CYMI lasers had actually been delivered to chipmakers' facilities.
-- There were more installs at chipmakers in Q3 than in Q1 and Q2 combined.
Next generation:
-- continuous improvement process (CIP) is being implemented in next generation lasers.
-- CYMI is more than one generation ahead in ArF lasers. CYMI will ship its first prototype of the latest ArF laser before the end of 1997.
-- Next generation ArF and KrF lasers will incorporate both "pulse stretching" and "multi-kilohertz operation" technology. CYMI completed significant milestone testing demonstrations during Q3 on this technology, and it recognized $1.4M in revenue from this testing. (Did not say which laser.) |
