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

To: FJB who wrote (10736)	11/29/1997 11:34:00 PM
From: BillyG	Read Replies (1) \| Respond to of 25960

Bob, I too was surprised by the "news reports." I think the reporters are wrong. SBN and EE Times usually do a better job. Maybe they had to borrow reporters from Barrons during the holiday weekend! BillyG

To: FJB who wrote (10736)	11/30/1997 4:27:00 PM
From: Yakov Lurye	Read Replies (3) \| Respond to of 25960

Service/maintenance revenues - anybody has a model in mind? Robert, your model for CYMI earnings looks good. There is an additional revenue source that in my opinion is consistently overlooked in economic analyses of the company future and is not yet reflected in the current revenue stream. So far, both the enthusiasts and the sceptics (and this can be the same financial analyst wearing whichever hat suits him more at the time), had used similar models for forecasting CYMI's revenues. Essentially, they try to figure the number of lasers that will be sold by guessing how many steppers/ scanners will be deployed, what are the delay times, does the "gang of four" laser have inventory on hand, etc. (A model of this type is used, for example, by Jay Deanha. It allows him to swing earnings projections very easily: decrease the forecast for the number of DUV systems to be deployed in 3Q98-2Q99 from 875 to 550, and the expected next year earnings are cut by 30%. All he has to say is that the first number was derived by VLSI by adding forecasts from individual manufacturers, and it seems too optimistic. Brett Hoddess may chime in and start asking about the levels of inventory at hand - implying that even if 550 systems will be deployed, 550 additional lasers may not be needed, etc). It is difficult to argue that forecasts for DUV deployment are inherently unreliable and highly subjective, especially with the current SEA situation. However, CYMER'S REVENUE FROM A DUV TOOL INSTALLATION SHOULD NOT BE LIMITED TO AAONE-TIME SALE OF A 450K LASER. My understanding of the DUV technology is limited at best, so I'll rely on an analogy to illustrate my point. I have bought a Canon bubble jet printer earlier this year. It included one ink cartridge. After a while, I ran out of ink and had to purchase another one. In a few years I might have to buy a better printer, not necessarily a bubble jet, but in the interim period I'll be periodically purchasing cartridges. So for the Cannon's division producing cartridges, a single printer sale translates into multiple sales of their product. The analogy between CYMER and cartridge manufacturers may be somewhat strained, but lasers have limited life, chambers burn out, etc. CYMER should be able to derive some revenues from replacements and service/support for working steppers. These additional revenues may be quite significant. They can't be extrapolated from available financial data and short-term (6 months) forward-looking statements by management because serious commercial deployment hadn't started yet. Can anybody with proper technical knowledge provide any insights? TIA, Y.