Doesn't the lack of a takeover by a giant like AMAT or IBM tell us that CYMI's technology is not as critical as everyone thinks? I hear and read on this board and elsewhere that CYMI's excimer laser is THE bottleneck to the whole generation of 0.25 micron equipment. If that's the case, why doesn't Canon or IBM or AMAT or whomever take CYMI out at $100/share (a few billion) or whatever price and gain MONOPOLY power over semiconductor equipment? Wouldn't that be worth considering?
Well, they're not doing it, are they? They aren't doing it this instant, nor have they done it in the past. That suggests to me that either the ROI of acquisition of CYMI's excimer laser technology is one or some combination of the following:
1) not as fruitful in opportunity as some other technology segment like software, networking, etc.
2) not apparent to people at IBM, et al. like it is to us geniuses
3) there is lower demand for 0.25 micron than we expect, so even if they had the whole 0.25 micron market, it wouldn't be worth enough
4) there is a SUBSTITUTE available that would break any attempt at monopoly
5) that IBM, AMAT, etc have colluded between themselves and decided they do not want to start a bidding war over access to CYMI intellectual property
Can we think about these things, and eliminate each one of them?
1) what could be more profitable and desirable than a lock on semiconductor manufacturing? If the CYMI=monopoly theory is true, any of those companies or GOVERNMENTS would gladly pay up for CYMI. Conclusion: the story is not true.
2) Could we have better research than IBM? Not likely. Conclusion: We are overstating CYMI's value.
3) Stepper customners are not ordering 0.25 equipment exclusively, showing they don't really need 0.25 but can get along nicely with just some. Conclusion: 0.25 micron demand is moderate not explosive.
4) Is there a substitute? Please discuss more on this thread. I think this must be the case. Solar power is great, but there is a cheap substitute. By the time we ever get solar cheap enough, we'll probably have fusion. Is this analogy applicable?
5) Is there a cartel in customers? Industrial organization theory predicts that if a commodity is in demand, collusion can occur on either the supply or the demand side. Cymer has only a handful of customers. Perhaps there is an agreement there to hold down prices for lasers. Maybe CYMI could try to break this cartel by threatening exclusive agreements, raising prices for impoliteness, etc. Wouldn't Canon be interested if CYMI threatened to sell only to ASMLF? Is CYMI reaping monopoly profits? It seems to me a monopolist can squeeze its customers harder, and CYMI is missing opportunities. Question: how much monopoly power does it really have?
The longer we sit here in the 20's, the more I think CYMI is not a monopolist, that there are substitutes readily available, that 0.25 demand is slow, that we have poor research and that there are better investment opportunities elsewhere.
Opinions?
Matt |
