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

To: Mr. Aloha who wrote (10313)	11/22/1997 5:46:00 PM
From: Gary Hoyer	Read Replies (1) \| Respond to of 25960

DRAM crisis solution: Higher density through DUV and Cymer lasers! The DRAM price collapse is the result of two things. The first is overcapacity resulting from certain companies (mainly Korean) desiring to build an industry and grab market share at any cost. The second is the natural progression of technology and the lower prices that ultimately result. What the analysts miss when looking at falling DRAM prices is this: 1. Companies that no longer want to build DRAM will switch their fabs to more profitable chips like ASICs. They're certainly not going out of business or even out of the chip business! In fact, the switch may even result in further capital equip. purchases. 2. Comapanies that choose to stay and fight will have to switch production to .25 micron and below processes (yielding higher density chips) as soon as possible. This means new DUV equipment and Cymer laser sales. Remember the hard disk crisis a few years ago? Prices for hard disks were falling like a rock. So how did those companies respond? By moving to more advanced techology they were able to increase the recording density and speed of their disks. The same 3.5" disk that held 100Meg 5 years ago now holds 1Gig, and while prices continued to fall, the more megs you could put on a disk, the more you could charge for it. The same is true for DRAM because, like disks, you charge so much a megabyte. Using DUV to produce 256M on a chip instead of 32M or 64M means you can sell that same chip for a whole lot more, yet it cost you about the same to make it. All the analysts seem to see is falling DRAM prices, and all they seem to be able to conclude is that the companies are going to lose money and not buy more equipment. My analysis seems consistent with what the equip. companies like AMAT and Cymer are telling all who will listen. Problem is the analysts aren't listening. Gary.