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Technology Stocks : Cohu, Inc. (COHU) -- Ignore unavailable to you. Want to Upgrade?

To: Henry D who wrote (1548)	10/20/1999 12:48:00 AM
From: Henry D	Respond to of 7827

maybe TER above estimate earnings might put a stop on our drop... COHU post #1379 has link to COHU 5 yr graph to those who are interested. im having problem adding link to this post. sorry.

To: Henry D who wrote (1548)	10/20/1999 1:37:00 PM
From: geoffrey Wren	Read Replies (1) \| Respond to of 7827

Cohu's 10-Q There 10-Q has an overall ominous tone to it. Here are some bits that got my attention: "During 1998 and 1999 the Company experienced difficulties in manufacturing and volume production of its new test handlers. These difficulties, which have been exacerbated by a significant increase in orders for the Castle and the company's other pick and place handler products, continued through the third quarter of 1999." " In response to a severe industry downturn in 1998, the Company reduced its total workforce by approximately 40%. During the first nine months of 1999, the Company increased its workforce by more than 50% as business conditions in the semiconductor equipment industry and the Company's order backlog improved. Such radical changes in workforce levels place enormous demands on the Company's operations and infrastructure since newly hired personnel rarely possess the expertise and level of experience of people they replace. The Company has recently experienced difficulties, particularly in manufacturing, in training the large number of additions to its workforce. In addition, competition for the employment services of certain personnel, particularly those with technical skills, is intense. No assurance can be given that the Company will successfully adjust its production capacity to meet customers' changing requirements. The inability to meet such requirements will have an adverse impact on the Company's financial position and results of operations." "Sales of gravity-feed IC test handlers used in DRAM testing have represented a significant percentage of the Company's total semiconductor equipment related revenue during the last five years. Due to changes in IC package technology, gravity-feed handlers are no longer suitable for handling many types of DRAMs. As a result, the Company has seen a significant decline in sales of its gravity-feed test handler products. The Company introduced its Enterprise handler in 1998 that employs a handling technique, known as test-in-tray, that is particularly suited for parallel test applications like DRAMs. While the benefits of test-in-tray may be significant and the Company sold a significant number of these handlers in 1998, market acceptance of this product has been very limited and the future use of this technology is uncertain. If the Company is unable to successfully develop and market new products or enhancements to existing products for DRAM applications the Company's results of operations will be adversely impacted." Now that is news to me. I was under the impression that COHU was doing well with the memory chip makers. In retrospect, maybe the purchase of Daymarc was a unprofitable diversion. It sounds like they are a one-pony show now: the pick and place equipment, which fortunately remains popular. Oh, well. I just hope this is all said in that conservative way of COHU, and the potential problems are not as bad as they have been described. GW