Speedfam [SFAM] Lovers Unite ! Message Board

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Technology Stocks : Speedfam [SFAM] Lovers Unite !

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To: spiny norman who wrote (3138)	8/12/1998 8:04:00 PM
From: Jay M. Harris	Read Replies (1) of 3736

Spiny; Amat has shipped 100 tools since the launch of the Mirra. They are rapidly gaining share mostly at the expense of SFAM. This is because they claim to have penetrated 50% of the oxide market which is where SFAM has had the most success. AMAT is currently developing a metal interconnect CMP process. They now have IPEC in their sights. IPEC still has an edge in throughput over Amat in metal CMP. I'm told 45 wafers per hour vs 34 for the Mirra in metal CMP on a similar footprint. maybe some engineers can help me on this point. In any event, AMAT will continue to gain share from IPEC and SFAM during this downturn. This is because AMAT has better global service and support and can work with clients to enhance process productivity. IMHO, an SFAM/IPEC merger is imperative. This is because this downturn has been the steepest in terms of order falloff in history over any 2 quarter period(50% decline)! And the Yen continues to slide with no let up any time soon. We are modeling 160 yen to the US greenback with much more blood in equipment land. Don't be fooled by the recent uptick in memory prices. This is simply the result of a decrease in wafer starts and Pacific Rim holiday rather than closing down fabs. As soon as the equilibrium price of memory improves the marginal producers will crank out more wafer starts. Cap equips have traded up because they are correlated with the SOX. However, I expect memory prices to fall again by late October as the tier two suppliers of commodity parts dump in the market and push lead times back in to get hard currency to service leveraged balance sheets. Many participants currently don't believe this and think the end of the cycle is near. These are the same professionals that called an end to the 1996 cycle when only 2 fabs went bankrupt and closed down. The rest of the fabs opened back up and with little in the way of incremental investment drove the supply as a result of Die shrinks. How quickly analyst forget! AMAT mentioned on the call 3 reasons for the cycle in 1998. 1) The thousand dollar PC with lower silicon content per box. 2) Overcapacity. 3) Asian Crisis and a decrease in the YOY growth of PCs from 15% to 13%. Jim Morgan was correct on all 3. However, he missed the most important part of the problem. DIE SHRINKS!!!!!!! I have argued with many of engineer on the impact of DIE SHRINKS on supply to no avail. We're currently talking 400 good memory chips per wafer at .25 micron. This increase in chips per wafer from .35 micron is what is killing memory prices. Engineers can't have their cake and eat it To! They espouse cost saves constantly, and quote Moores Law with little or no mention of the impact on global supply! I've yet to see them produce a good supply model with a shift in technology from .35 micron to .25 micron. Consequently, they consistently underestimate supply of chips. The same thing happened in 1996 when the commodity makers went from .5 to .35 capacity. Too much supply. Oh well enough harping for one day.... It is too late to sell SFAM and too early to buy!!!!!! I hope this post helps, Best Regards, Jay

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