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

To: Mike Harvey who wrote (6203)	10/24/1997 5:57:00 AM
From: Robert Scott	Respond to of 25960

Margins are expected to improve beginning in Q1 1998 - also said it might begin next quarter but due to some additional expenses relative to new plant, didn't want to commit to an improvement then. The only thing that was a little confusing to me was that they shipped 126 lazers and said that Dataquest analysis was probably right for shipments while VLSI analysis was probably right for lazer demand. Dataquest, I believe predicted something like 500 steppers next year and the ratio of lazers to steppers is between 1 and 1.5. So, the expectation is that 750 lazers will be shipped next year. On a run rate basis, this represents only a 50% increase over current run rate. This would mean a deceleration in sequential revenue growth unless Cymer can raise prices. It seems to me based on the call that the only reason we won't ship 1000 lazers next year is that the stepper manufacturers can only ship 500 or so steppers due to their manufacturing constraints - not demand for steppers. But they're getting more efficient and Cymer expects that while new generation lazers require 6 months to fully integrate into the steppers before shipment to semi companies, older generation lazers can be integrated in 3-4 months. What was also clear from the call is that the more to .25 micron is accelerating - only way semi companies can reap significant cost savings.