<No, I don't work for AMAT but I am long AMAT. Although I hate the company I'm not dumb enough to bet against them right now.
<I apologize if my email was confusing...>
No problem regarding confusion...much like the market, both stock and otherwise. Besides I've flubbed a post or two in my life.
<...but I know of what I speak in this area...>
You may not be the only educated investor on this thread...or the only person on this thread familiar - intimately or otherwise - with the technical aspects of semiconductor process or how the marketplace is evolving. I suggest you wait a while before passing judgement on other people's backgrounds or risk-reward models for investing.
<...I am willing to bet more than anyone here.>
And how do you know how much "anyone" else has invested in SFAM or AMAT et al.? Did you write the Melissa virus and crack into other people's online accounts? :~)
<So, I will try to respond to each part of your response.
1. With respect to AMAT's PR machine. In general, I don't think they are issuing PR's on every order at this point. Suffice it to say they have received significant orders from Samsung and Hyundai, all delivering between Feb-Jul with more Samsung orders planned in Q3 or Q4. ALL these went to AMAT. These were capacity buys and obviously have nothing to do with the copper issues.>
Where are you getting your information from? Can you point to a public document (SEC or press release) that would support this potentially serious suggestion? Without this, I cannot comment. As far as I understand, your statement as to "ALL these went to AMAT" is rebuttable by SFAM's most recent 10Q, as well as AMAT....eventhough the later is a bit dated. As for AMAT's PR machine, I disagree. AMAT has never passed up the chance to issue a press release relevant to the faster growing segments of their business.....I cannot recall the last time a major order was given to AMAT which wasn't PRed. In any event, this will all become "known" by the time AMAT issues it's earnings release and 10Q.
<2. The installed base only gives you a slight edge when new orders are coming. If it meant a lot then IPEC wouldn't have lost big at Intel.>
Whom have they lost too? Do you work at Intel then? I haven't heard from my friends in the Valley or read anything that Intel has bounced SFAM-IPEC in favor of Ebara (or did you mean AMAT? :~)).
<3. FYI, the companies most supporting AMAT are in fact Intel, TI, Micron.>
Work at TI or MU? Again, how do you know and what is your source? If you are posting inside information, I suggest you read the recent history who pumped up Pairgain I believe.
As for scuttlebutt, my information has not led to your conclusory statements...which does not make me right.
<NSC and AMD don't buy nearly the same amount of equipment as either of the previous 3 named together! While everyone says, "The IC companies don't want AMAT to become an even bigger gorilla" that is in fact what is happening.>
The cycle hasn't kicked in to date as far as I know, so even with CMP being the fastest growing segment, aren't you being a little premature, especially since AMAT has given some of its equipment away or at minimal cost? Oh, yeah, what about Moto and Seimens? Are they dead too as an installed base or just too small?
<4. I agree with your statement that SFAM does not have to get 50% of the orders for the stock to move but... They better get at least 20% of them and I seriously doubt (and would be willing to bet money) that they are getting that much. The number is probably more like 10%.>
Your bet is duly noted, as is mine. I choose not to be so certain about anything however, and have bought some AMAT, though I own significantly more SFAM because they fit my risk-reward model. What is your risk-reward model? What is the high end P/E, PBR and PSR going forward for AMAT in your view?
<5. On copper. My apologies for confusing you.>
No reason to apologize.....I am surely not clear with every posting.
<SFAM has no tool for copper that is even close. IPEC is very competitive and is winning orders. (See the thread on the UMC order).>
Now I am confused. As IPEC is part of SFAM, SFAM has now a competitive Cu tool....and I assume as per their 10Q, they will be attempting to integrate their previous strength oxide, with IPEC's Cu strength to make either a better integrated tool or tool offerings, while eliminating redundancies to maximize cost efficiency.
<The eval fights on copper may well be very important and dictate who ultimately wins, I'm sure you'll agree.>
Yes. But until the cycle kicks in, nothing is set in stone. Until large orders are placed (which is looking to be late 2nd half of '99 at the earliest), everything is subject to change. See original Samsung order to IPEC and SFAM (not Ebara, Strasbaugh or ... uhh ... AMAT :~)).
<Once an eval tool goes into a fab, you have to really blow it to lose the production buys.>
Assuming that the ramp up is within some reasonable period. If things are pushed out to early '00, whatever information you know or believe to be true, may become moot.
<There are about as many cases of AMAT losing an eval-to-production buy as there are photographs of Bigfoot.>
Cannot comment on this, so I will leave to those who know Bigfoot better. :~) I will comment though that you don't seem quite objective though....and maybe for good reason. I am reading a lot of conclusory statements without some evidence. This doesn't make you wrong...it just hasn't convinced this juror. If you cite something, I and the those longs on this thread inclined to seek out the truth would be more convinced. Having said that, I still believe SFAM is a good investment at this price because of my risk-reward model.
<6. Regarding the Auriga. I'm only saying that they are losing because the tool is not as good as the Mirra as evidenced by the current order rate I am seeing.>
I thought you stated earlier that it was a capacity issue driving these decisions or am I in need of more sleep? I know of evals that have concluded that Mirra is superior to Auriga-C for oxide. I do know of some to the contrary, however, taking into account Auriga-C's footprint, COO and other relevant factors in comparison with Mirra.
<Although there is not a wave of press releases stating it, I can only tell you that I know this to be true. AMAT is winning convincingly right now, installed base not withstanding. AMAT predicted they would have 60% of the market this year and that the market was going to be around $800M at their annual shareholder meeting. If they get 60% that's almost $500M and I'm willing to bet that's very conservative. If what I say happens and SFAM/IPEC only gets 10% of the market, that's only $80M. Their numbers won't look so good if that happens.>
No their numbers won't look so good...but then 60 + 10 does NOT equal 100. I guess there must be 30% under your analysis that has not to date been defined. I would think this is what SFAM will targetting. :~) I believe 25-30% is reasonably...maybe hopeful(?)...target, contrary your "personal" knowledge.
<7. And last. AMAT is NOT giving away their CMP tools.>
I beg to differ with you here sir. Unless you work for AMAT, you could not know what there pricing structure for CMP specific tools in each and every "sale." I do know of two specific occurances wherein AMAT essentially gave their CMP tools away. I suggest you contact AMAT's and SFAM's IR departments.
<The CMP group is the fastest growing group at AMAT and probably one of the more profitable.>
Until your personal knowledge becomes public, and until AMAT releases their earnings with a break down of each division, I cannot rebut this nor will I attempt.
<AMAT does give away its share of eval tools for sure, but I doubt it's as many as everyone thinks.>
Do you doubt or are you sure?
<Sorry for the long response, hope this answers your questions.>
Thanks for the information. I look forward to it becoming public or for you to cite something public which I would convince me otherwise. Until then, I will keep as always an open mind....something every investor should do along with some due diligence.
<Again, no I don't work for AMAT but I know the CMP market.>
In what context do you know the CMP market? Technical, business or investment?
<Also, I like the SFAM & IPEC people, some are my friends. I'm actually hoping that NVLS buys SFAM soon, that would shake AMAT up.>
One way or another, AMAT will have competition in the CMP marketplace. Hence, IPEC selling out to SFAM. I hope to be SFAM, either as an independent or subsidiary.
Thanks for insight into your strategy. Hope my post wasn't to adverse, but I am looking for support for your conclusions that I can grab onto. Without that, I hear you and can only respect your position.
Best of luck in you investments....SemiBull
PS - Say hello to your SFAM/IPEC friends from the thread. Out of curiosity, do they fear for their jobs because of an impending consolidation due to SFAM's buyout of IPEC? |
