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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (12200)	11/25/2004 1:13:04 PM
From: Cary Salsberg	Respond to of 25522

RE: "NVLS has been a major laggard, as I predicted might happen, from trying to digest SFAM." 1. CEO Hill has stated in conference call that NVLS is breaking even with SFAM. The revenues from supporting the installed base are covering the cost of those revenues and the R & D effort in CMP. 2. The market sees lower gross margins at NVLS due to SFAM's lower margin, support revenue and lower net margins at NVLS because there is no profit on the SFAM revenues. There is a combination of lower margins and "uncertainty" about the SFAM acquisition and the price suffers. 3. It appears that NVLS has bought the SFAM business for peanuts and has developed new products at breakeven. If, as I suspect, NVLS will have its usual success, the "new" CMP division will produce more incremental revenue in the next 3 years than LRCX will produce from market share gains in the next 10-15. 4. As I mentioned, I sold LRCX for over 7 times my cost in 2000. I sold all the ASYT in my tax deferred account for over 10 times my cost. I don't mind mentioning these, but I take little credit for anything but selling. They were not the best companies when I made the most money from them, and they are not the best now. I say this because you like to present past data and attempt to use it to support your investment moves. There is no doubt that investing is probabilistic, not deterministic, and, short term, luck is more important than skill. I can't be certain that LRCX or UTEK or ASYT will not outperform my 8 sometime in the future, but I can be certain that the risk/reward expectations wildly favor my 8. 5. I regard the period 1998 to the present as an anomaly. I don't believe the data has very strong predictive significance. Any value that this data may hold must be based on "heuristic" adjustments. Of course, we each have our own "heuristics". 6. I question your statements "Few follow Lam" and "Lam credit for gaining market share". I have seen little if any net market share gain and LRCX is followed as might be expected for a "leader" in semi-equips for close to 25 years. Happy Thanksgiving

To: Kirk © who wrote (12200)	11/26/2004 9:26:55 PM
From: etchmeister	Read Replies (6) \| Respond to of 25522

I used to design ICs. I noticed that the number of intercommect layers was growing as chips got more complex. Yes, yes that NVLS's growth concept is built on - while number of chips might grow at a certain pace this pace is being turbo charged by increasing complexity = number of interconnect layers (to be deposited) and consequently numbers of layers to be dry etched. (I believe Varian Implant situation is somewhat similar because the number of implants is increasing as well as complexity continues to increase). If you "normalize" NVLS stock price by comparing to AMAT you notice NVLS lags as well (I recall they moved 2:1; based on AMAT's $17 NVLS should be around $34 - of coursw that's a rough cut) LRCX is catching up in regards to margin (operatins) while maintaining leadership in technology. Novellus has been adding PVD, strip&clean as well as electroplating to its original CVD. In case NVLS would have been equally successful in its (core) CVD like LRCX is in etch the NVLS topline should be at least 1.5x compared to LRCX considering they added Varian PVD as well as Gasonics and electroplating (don't even consider SFAM). Cary has a number of points I agree with but equally a number of points I do not agree at all - but that's markets are about - different opinions