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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (24351)	2/28/2000 9:04:00 PM
From: Zeev Hed	Respond to of 25960

Jay, that is exactly what worries me, the last cyclical peak was within six months, I believe of the industry reaching peak capacity utilization. Everyone has put forward their cap ex plans, every one will be busy building new facilities and within few quarters of that event , oversupply will appear. The cap stocks will peak first and then the chips stock will follow, except that this time, it might be associated with an additional scenario we did not have then, a recession in the US. Of course, my road map mat be wrong, but I'll have ample time to change my opinion, the turnips say they reserved that right. Zeev

To: orkrious who wrote (24351)	2/28/2000 11:02:00 PM
From: Andrew Vance	Read Replies (1) \| Respond to of 25960

Hi, The following message and question was sent to me via nprivate mail. After respnding to the message, I was asked to post the question and the answer here to stimulate some conversation. Stimulate is an interesting word since it could also wind up as throwing gasoline on an already incendiary situation<GGG>. So for better or worse, here we go. Andrew, what is your opinion on the semi-equip "cycle?" I know you expect an overall downturn in the techs during mid-March to mid-April. But do you think that sometime in the late 2000 to late 2001 timeframe the current capacity expansion will result in semi mfgrs having too much capacity, leading to orders dropping off and a tanking in the semi equip stocks prior to the 300mm buildout? If this happens and the market discounts 6-9 months in advance, the semi equips will be taking quite a hit. I am way overweighted in the sector, especially CYMI. I have held for two years and don't mind holding for longer, but I do want to reduce my exposure a little rather than taking a 50% hit while waiting for the next up leg. Your thoughts are appreciated. RESPONSE From: Andrew Vance Sent: Monday, February 28, 2000 10:32 PM Subject: RE: CYMI and the other semi equips Late 2001 is when the 300mm equipment will be shipping since it will take close to 24 months for the recently announced 300mm plants to be completed. The upcoming reversal will be artificially induced, if it comes to pass. There is no real reason for it to happen but it must occur to fulfill market expectations. CYMI is probably one of the few stocks that WILL NOT suffer if we reverse in the timeframe you are worried about. Even as we back off in capacity, the need for advanced technology will still require DUV litho. I would expect that the equipment sector may enter its peak period at the end of this year and level off slightly in early 2001. That lull might adversely affect the stocks in the group until the 300mm kicks in. We WILL NOT put the 300mm initiative into mothballs again. What I have not been vocal about is whether some of the state of the art plants today are able to be upgraded to do sub 0.13u devices going forward. That is, I fear that certain enabling technologies might be limited to the new 300mm equipment and that not all of the 200mm fabs in production today might be able to get the proper equipment for their 200mm lines. I have yet to see the process roadmaps for 0.13 and below and whether the toolset at 200mm is production worthy. Unfortunately, I have a big question mark right now on this subject. But back to your question. IT will be a matter of market perception prior to industry reality that will cause a slow down in these stocks. The street will start punishing the equipment stocks when the sequential growth numbers start leveling off. BTW - I would expect that CYMI might be subjected to some backlash from the IBM article that appeared today. IBM is about to use next generation (non DUV) processes to manufacture some advanced devices. I fear it will be misinterpreted by some of the less knowledgeable investors. Andrew PS - I was not keeping up with this thread today, so I am not sure if the story below was printed here. My only comment here is that e-beam lithography has been the next generation for more than 15 years. we always found a way to extend conventional lithography so I am not really concerned. Monday February 28, 4:39 pm Eastern Time IBM to unveil new chip-making technology NEW YORK, Feb 28 (Reuters) - International Business Machines Corp. will unveil details this week about a new chip-making system that can create tiny semiconductors for smaller but more powerful cell phones and personal digital assistants, company officials said on Monday. The next-generation system will use electron beams, rather than light waves, to etch circuits onto chips. Electrons can go to much smaller levels than light beams, which IBM (NYSE:IBM - news) said addresses some concerns that existing chip-making systems that use light waves may be reaching physical limits. ``It allows the industry to continue making the chips smaller, faster and lower power. That's the significance,' said Bijan Davari, vice president in charge of IBM's Semiconductor Research and Development Center in East Fishkill, N.Y. The details of the new technology, which IBM is developing with Nikon Corp. , the Japanese photography giant, will be detailed at an industry conference this week in Santa Clara, Calif. The new system, named Prevail, which stands for Projection Reduction Exposure With Variable Axis Immersion Lenses, will be used to produce chips for many different products ranging from small hand-held devices to super-computers. The technology will be available for use in chip-making equipment after 2003, Davari said. IBM is in a race with others in the industry to develop new chip-making technologies. In November, chip equipment makers ASM Lithography Holdings NV and Applied Materials Inc. (NasdaqNM:AMAT - news) said they would work with Lucent Technologies Inc. (NYSE:LU - news) to develop Lucent's SCALPEL system, which uses an electron beam instead of light to imprint circuits on chips.