Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Cymeed who wrote (10744)	11/30/1997 3:46:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 25960

Cymeed, under the "right circumstances" the market might indeed chose the valuation model you present. Yet, it might make sense to try and look at the capacity of the market to absorb so many .25 microns tools. In order to come up with a rational figure, we need to estimate the conversion rate to .25, and also the number of processing steps that reuires the eximer laser per wafer. We know that typically, an eximer laser based DEV system can process about 300,000 wafers per year. If the sales rate were to reach your 2000 units per year, I would not be surprised to see complete saturation in 3 years. Look at it from another point of view, a system with the Eximer laser goes for around $3.4 MM (and please feel free to correct me, since this number is from memory) at 2000 lasers per year we will have total sales of $6.8 B per year. But in a good year the total cap expenditure (including infrastructure) in the semiconductor industry is about $30 Billions a year, so assuming 2000 units per year would suggests that 21.3% of all expenditure for semiconductor equipment and infrastructure will go to DUV lithography. This will not leave much for other processing steps. It is quite possible that the current capacity of 1000 units per year may already exceed what the market will demand. My point is that the current growth rate of 30% per year may not be maintained over the next three years, unless CYMI will capture other processes in the industry, and for the time being, I do not see that as part of their expertise nor as part of their road map. The market might very well be looking 3years down the road and see a growth rate of no more than 10% per year and thus lower valuations. Zeev