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

To: Gary Hoyer who wrote (7680)	10/31/1997 7:16:00 PM
From: FJB	Read Replies (2) \| Respond to of 25960

Yup, you don't need to build a new fab to go to DUV. The bottom line is all fabs with the required infrastructure(class 1 cleanrooms) are going to DUV. Keep buying Cymer. Bob

To: Gary Hoyer who wrote (7680)	10/31/1997 8:26:00 PM
From: PAinvestor	Read Replies (1) \| Respond to of 25960

Gary & thread, Indications are that semiconductor capex growth from the chip companies in Asia will be below their recent forecasts due to the poor state of the DRAM business. There should still be year-on-year growth but there will be a marked deceleration from previous growth levels. Now, some may construe that this will be a negative for the equipment suppliers - it may well be for some of them. But there is plenty of evidence that despite slowing capex, the allocation by the Japanese, Koreans and Taiwanese to chip-shrink technology in their total capex will increase. This basically means that they are attempting to accelerate to 0.25 micron processes ahead of their rivals. It is a battle of attrition and the first ones there will be the longer term winners. I have yet to see any analysis that researched (ie quantify) this point in detail. In fact the following point is the most important one to answer: is the move to 0.25micron technology and below accelerating or decelerating? We know that capex growth will slow but will the acceleration in procurement of shrink technology as a proportion of the total be enough to offset the deceleration in overall capex? The chip makers have too much capacity for current demand levels. That is why chip prices are so low and they are losing money on their chip manufacturing operations. All the players in the market want to survive and they are confident that they will eventually make money again. Over the next 12-24 months it is unlikely that there will be a closing of the supply/demand gap, and therefore we will still be in a position of overcapacity for sometime to come. Therefore chip prices will remain low. All the chip makers realize this and are trying to drastically reduce costs of production. An interesting point that I have been told is that all up, it actually costs more to slow down or stop a fab line than it does to keep it running at full capacity - regardless of pricing levels. So the only alternative is to reduce costs by shrinking the size of the chips on the wafers and therefore increasing the yield significantly. In addition these chips command more of a price premium than the previous generations - witness the price premuim on a Synchronous 64meg chip versus a standard version (some 5-10%). This can mean the difference between making or losing money. More chips per wafer means lower average cost and better chips mean higher selling prices. It will be those manufacturers that will be able to shrink the most quickly and efficiently that will survive. This week's The Economist has an article on chip makers in Asia and the fact that the Korean manufacturers borrowed heavily to support their DRAM expansion and may meet trouble soon. The Japanese and Taiwanese have by comparison much deeper pockets. They all realize that this market is not going to turn around soon. They must invest in DUV to survive. PAinvestor

To: Gary Hoyer who wrote (7680)	10/31/1997 11:51:00 PM
From: Maxwell	Read Replies (3) \| Respond to of 25960

Gary Hoyer: <<My question has to do with the equipment that is required by the semis to take their processes down below .25 microns. Assuming the semis have class 1 clean rooms, isn't it true that all they really need of major significance is a new photolithography tool (and Cymer's laser of course)?>> You are essentially correct. To migrate to .25um process you need about 10% of your lithography tools to do the critical layers at .25um. An existing fab would need at least 2 steppers to do 1 layer (one as a back up for the other) and at least 3 steppers to do 2 or more layers. You also need some thin film deposition tools to do .25um also. High density plasma (HDP) and CVD TiN come to mind. You also need a few special etchers to do contact and metal etch. You don't need to upgrade the furnaces, implanters, or polishers. Chip makers will choose excimer steppers over UV bulb type ( I will explain in my other post later). <<My point here is that I don't think the semis have to invest in a whole new fab or lots of new and expensive tools to move to smaller geometries. That said, I believe Cymer and Cymer's customers are very much immune to a general tech downturn that may be the result of HK or overcapacity or falling prices. The rush to .25 and below will not stop for any reason.>> You are also correct here. The Taiwaneese will migrate to .25um at full speed regardless of the currency problem. The reason is that they must do it to remain competitive. Their foundry business is based on low cost manufacturng to their customers. They will be worthless if they don't have the advanced process. It is the advanced process that achieves smaller die and higher performance chip at lower manufacturing cost. This is why the Taiwaneese is putting a big order to buy AMMLF excimer steppers. Recently CYMER is out of favor and the stock is slowly sinking. It causes alot of people on this thread to be worried. As far as I seen, nothing has changed. The fundamental is strong. Semiconductor will grow double digit in 1998 and lithography growth will outpace that. This is your opportunity to buy more. If you have done so just forget about it and revisit it in Jan 98. Q4 earnings should put everyone's fears to rest. CYMI should be able to ship at least 150-200 lasers in Q4. Remember CYMI is not getting alot of exposure like the equipment makers. CYMI gets only 1 chance every quarter to shine. So far, they have done spectacularly 4 quarters in a row. I can guarantee you that if they continue to do that a few more quarters they will not be in the low 20s like we see now. You don't sell CYMI in the 20s. You sell them in 60s- 100s for a 3-5 baggers or you sell them when you see they can't grow anymore. As far as I have seen, the semiconductor industry is just starting to migrate to .25um and CYMI is at the verge of explosive growth. Maxwell