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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (5234)	2/17/2005 12:55:23 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 5867

RE: "...need more etch tools (and deposition, plus CMP)." AMAT is the leader in deposition and CMP and 1 of 3 in etch. LRCX is 1 of 3 in etch. Tough choice. RE: "...when I see they've digested SFAM and have a good CMP tool making profits." There was nothing to digest. The SFAM acquisition was never losing money. RE: "LRCX adopted to the New World Order of moving labor out of Silicon Valley and only keeping design in-house quicker than the others. As such, they are showing better profits earlier in the cycle." LRCX has higher gross margins than AMAT, ~50% to ~45%, and NVLS ~49%, because it has a very narrow product offering. LRCX has no new product categories that are ramping up volume and margins. The advantage for LRCX is obvious. Slightly higher gross margins and much lower R & D as a percent of sales. RE: "... have been pleased with the relative out performance." You have a good strategy for short term to, possibly, intermediate term trading. LRCX has optimized its performance and it has produced better results than AMAT and NVLS (but not KLAC). I only disagree with your strategy for the long term. LRCX is not as robust as AMAT and NVLS because of its narrow product line. LRCX is subject to more risk and its growth potential is more limited. I believe that trading profits you gained during this post bubble readjustment period will pale in comparison with the profits that will be generated by the growth of AMAT and NVLS. If you switch into AMAT and NVLS at the right time, you will prove yourself an excellent investor, but LRCX will still be second rate in comparison with the other 2.