Here is my understanding. As line widths get smaller, chips become more and more complex, and masks take longer and longer to write, thus requiring more mask-making equipment, so the requirement of more and more equipment is not likely to lessen any time soon. However, these machines are very complex and take a long time to build, and additional time to install and debug, so only a few machines can be built/installed in a given quarter.
ETEC is facing a new competitive threat from UTEK. The initial UTEK machine was purchased by PLAB and has not been completely installed. Even if it does have some competitive advantage over ETEC equipment it is not reasonable to believe that UTEK could ship more than a machine or two a quarter any time soon, so there is no likelihood that ETEC will lose its position as the primary supplier in the near future. In the time it will take UTEK to ramp up production, ETEC will no doubt improve its offerings as well, so UTEK will have to continue to make improvements to continue to be competitive.
The point is that even if the UTEK equipment has advantages, that only makes things interesting, and make reduce ETEC's margins, but it doesn't change the lead. ETEC has faced competition before, and has survived. Despite the fact that UTEK is a Wall Street darling, they still have an uphill battle, and that is true even if they have designed a good initial machine.
Carl
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