JG --
Thanks for your analysis. The block buyers very well could be those who attended the Morgan Stanley Dean Witter mini-conference.
As requested, here's Part II of the Cymer report:
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As usual, the detail and scope of Cymer's presentation underscored how difficult it will be for Komatsu and/or Lambda Physik to penetrate the excimer laser market and garner a substantial share.
In particular, Cymer highlighted its growing portfolio of excimer lasers. Most of the company's revenues are derived from its 5000 Series laser. However, as this year unfolds, we expect Cymer to ramp shipments of its 5010, Orion, and 5000A (193 nanometer ArF laser) systems. Therefore, the company's ASP in 4Q98 should be about $450,000, up from the low $400,000 range in 1Q98.
The 5010 will be used in second generation deep-UV steppers and first generation excimer-laser-based scanners. Relative to the 5000 Series, the 5010 generates a narrower bandwidth, improved pulse energy stability for better dosage control and yield, and longer chamber life to reduce overall cost of ownership. Two stepper manufacturers have received initial shipments of 5010 lasers, and we believe Nikon plans to use them in quantity starting in 4Q98. The 5010 laser improves the ability for a stepper to achieve its advertised specifications in volume chip production. We expect the 5010 to sell for about $500,000 compared to the 5000 which sells for $410,000-$420,000.
Cymer's Orion series laser will begin to ship in 3Q98 and is targeted for second-generation high numerical aperture scanners. It offers two times the power (20 watts) and pulse repetition rate (2K HRz) as Cymer's 5000 class lasers. We expect Orion class lasers to sell for about $600,000.
Cymer shipped its first 5000A 193nm ArF laser in 4Q97. 5000A lasers will be used for 0.15- and 0.13-micron process development.
Cymer lasers are the only lasers used in 0.25-micron volume production and we believe Cymer is the only supplier of 248nm lasers currently being used for 0.18-micron process development by chip makers.
We expect Cymer to remain the leading-edge supplier of lasers and to maintain a dominant market share. However, we expect Komatsu and/or Lamda Physik to gain some share as 0.25-micron deep-UV steppers are purchased for non-critical lithography steps in the 0.18-micron generation and beyond.
Nonetheless, following the current inventory correction, we expect Cymer to continue to experience steady unit shipment and average selling price expansion. As a result, like the other members in our Food Chain thesis, we expect Cymer to experience above average revenue and earnings growth relative to the average semiconductor capital equipment company for the foreseeable future. >>>
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