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Technology Stocks : General Lithography -- Ignore unavailable to you. Want to Upgrade?

To: Qualified Opinion who wrote (1138)	2/10/2000 7:36:00 AM
From: FJB	Read Replies (2) \| Respond to of 1305

There won't be much money flowing into SVGI stock until they can expand their lithography customer base. So far, there is not much evidence that they have made progress in this area. I think Andrew's commentary was right on the money.

To: Qualified Opinion who wrote (1138)	2/10/2000 2:04:00 PM
From: Artslaw	Respond to of 1305

Rob, I've seen this argument about INTC buying from SVGI being in indication of SVGI's current and future greatness. To quote you, Intel will only order the best equipment. Now, Intel is a great company and they certainly aren't stupid, but if you've ever seen them present at a conference (for instance, the International Electron Device Meeting), you'll see them present one consistent fact about their processing: "Copy Exactly!" (and that's about ALL they say). The idea is, at every single fab producing on the same process, they use exactly the same equipment. Thus, rather than give each fab the latitude to tweak their processes, they rather make sure that everyone does the same thing, so that tracking down problems is much easier (as you've removed so many of the variables). With that in mind, and recalling how many problems other companies have had when ramping up fabs with new equipment, it is quite reasonable to expect that Intel would stick with the equipment they already know and, once decided, will put in lots of orders for that exact same piece of equipment. So, it is good to have Intel as your customer, because they will buy lots of your equipment. However, the fact that they do not switch away from it is NOT indicative of its current state-of-the-art "goodness." A second aspect, which is probably a lot less obvious, is that big companies simulate how lithographic exposure will work. This includes modeling the physical equipment, the masks (with all their phase shifts, plus off-axis illumination, etc.), the photoresist exposure response, you name it. Once they have perfected the modeling, it's possible to tweak your process beyond the norm, and no doubt Intel does (i.e. "We don't need no stinking copper yet!"). That's another reason to not switch litho tools (or any part of the flow), since you've already characterized a good part of the lithographic variation {of course, if their models are physical enough, they can technically plug in any specs from any tool/resist combination, but if you've ever modeled anything under time constraints, you know this is rarely the case} Anyway, as with Andrew, I tend to have a pretty neutral view of SVGI, and I think the litho market in general is a very difficult one to "win." However, I agree with those who said UTEK is even worse off! Steve (who holds no litho stocks)

To: Qualified Opinion who wrote (1138)	2/10/2000 3:49:00 PM
From: Andrew Vance	Read Replies (1) \| Respond to of 1305

Everything you state here has great merit. Intel does not necessarily order the best equipment. Intel orders the equipment they want because they can afford it. The decision is always based on a bit of ego. The best equipment is not necessarily the most cost effective equipment. I find it hard to drive home the point of cost effective. When you run as high a margin on products as Intel does, you can use whatever equipment is necessary to get the job done correctly. So, even if the SVGL is the BEST, the majority of end users that have lower margins for product they manufacture, need to balance cost and cost effectiveness versus what can BEST do the job. The best way to make 0.25u or below devices is to use DUV lithography at all layers. This is an overkill and extremely expensive. INTC can do it if they want. 90% of the industry cannot do it or they will go under. INTC has never put together a cost effective operation, IMHO. They are a breed unto themselves. When Charter Semiconductor, Winbond, Taiwan Semiconductor, WaferTech, and other larger foundries or even large DRAM producers chose equipment, I look at it more closely than what IBM or INTC buys. The success will come not from selling Corvettes to millionaires buy Chevys to the masses<GGG>. BTW - I think as you that ASML is overvalued. I am not sure if it is grossly overvalued. Then again, the Top Tier Equipment and IC Manufacturing stocks we follow are overvalued as a group. Then again, they are properly valued when compared the Internet stocks<GGG>. AV