Hi Brendan,
I had lunch with the Chairman right after this agreement was announced. He basically told me that ASM could not fill the demand from Taiwan and were forced to ask UTEK to step in and take over. He said this was a great deal for them because they would be able to penetrate a market where they were not that big.
We are looking for a good quarter. The stock has run up in anticipation of this. The visibility issue will be important here -- from the information we have they are booked out through the first quarter of next year -- they only announce shippable bookings (two quarters out) in their financial releases. This is a conservative practice -- they do not want to mislead shareholders (orders are somewhat fluid when you get out much farther than six months).
It is our belief that the business UTEK addresses, thin film heads, micromachining and noncritical lithography, will grow to at least $1 billion by the end of the decade. This company is a true warrior, in the past they have run the likes of Canon and Nikon out of the noncritical lithography business. One reason these two "biggies" left this area is because it was tough for them to compete selling machines priced between $750,000 and $1,250,000. They like to sell the steppers for sub .50 micron processing and because UTEK was so good at the noncritical niche, decided that it was not worth the effort. The tools Canon and Nikon sell have price tags four or five times as large as the UTEK offerings.
Good company, great management, buy on weakness (yes, we own the stock).
Have a nice day,
Carl
INFRASTRUCTURE
infras.com |
