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

To: Narotham Reddy who wrote (345)	1/22/1998 8:27:00 PM
From: GREATMOOD	Read Replies (1) \| Respond to of 582

To All: E-MAIL ADDRESSES FOR CYMER IMPORTANT INFORMATION: We can now directly communicate with our company! wall_st_yoda over on the Yahoo! thread was able to find out how investors/shareholders could contact CYMER through an e-mail address. The e-mail addresses they have set up for contact with the company is as follows: investorinfo@cymer.com AND marketing@cymer.com

To: Narotham Reddy who wrote (345)	1/22/1998 8:31:00 PM
From: Melkon Khosrovian	Read Replies (1) \| Respond to of 582

Here's Brett latest take on the cap sector. He's quite optimistic overall, with lots of mentions of .25 micron as key enabling technology and a growth area. No mention of Cymer, of course. Interesting note on valuations: "we don't believe the group will trade much below two times the 1998 market-cap-to-sales. The long-term average price-to-sales has been 2.1 times for the group." What exactly does this mean for Cymer? Semiconductor Equipment Growth Forecast for '98 January 21, 1998 By Brett Hodess Whenever technology stocks dip, the semiconductor equipment makers seem to get hit first, and often hardest. Concerns regarding Asian currency devaluations and memory-chip pricing, combined with swings in the overall market, caused an extraordinarily sharp decline in semiconductor equipment stocks at the end of December. However, we believe the main concern in the future will be supply and demand for chips, rather than currency issues. If chip demand is sufficient, efforts to improve chip testing and yields, to lower dynamic random access memory (DRAM) costs and to convert memory factories to foundries should enable the semiconductor equipment market to grow in 1998. Also, if European chipmakers rebound--and open their wallets--the equipment market will get an added boost. Front-End Fab Gear vs. Testing Gear We believe DRAM cutbacks and the Asian financial crisis will result in slow or possibly down sequential quarters for some equipment makers. Front-end wafer fab process companies will bear the brunt of the slowdown. Orders from Korean companies have already started to slow. Dongbu, a Korean joint-venture DRAM startup, has been postponed indefinitely because of tight financing. Similarly, Hyundai Electronics Co. Ltd. and LG Semicon have postponed massive fabs planned for the United Kingdom. But we estimate that back-end areas such as test and assembly will each grow about 10 percent in 1998, while fab equipment sales will increase only 2 percent to 3 percent. On the fab side, we expect high differentials in equipment growth rates. Deep-UV (ultraviolet lithography for 0.25-micron and below chips), CMP (chemical mechanical planarization), high-density plasma CVD (chemical-vapor deposition) and automation and process control (yield enhancement and measurement equipment) should continue to outperform the overall front end. DUV, CMP and HDP CVD are three of the key technologies driving a rapid transition to more advanced chips, while automation and process control are productivity (i.e., cost reduction) enhancement tools. CMP and automation have been more leveraged toward logic devices (microprocessors and digital signal processors) but are beginning to be adopted for DRAMs. Also, many DRAM companies that stopped spending on 16-megabit DRAMs earlier in the year have begun to follow Micron Technology Inc.'s example, aggressively shrinking the size of 16-Mbit chips. This strategy is driving a sharp increase in capital equipment upgrades in existing DRAM fabs. The idea is to reduce the die size by moving from 0.35-micron to as low as 0.25-micron, thereby cutting costs so as to remain profitable, even as 16-Mbit DRAMs hit sub-$3 spot-market pricing. Numerous Korean, Japanese and Taiwanese memory suppliers are taking this route. We believe the upgrades will drive substantial bookings growth in the near term for equipment companies. Test-equipment makers will benefit from a major upgrade cycle for logic, mixed-signal and memory testers that is well under way. New gear is needed to test high-speed integrated circuits that cannot be handled by the current installed base of slower-speed testers. Finally, as DRAMs remain in overcapacity, many memory makers may try to convert their fabs in order to subcontract chip manufacturing for other suppliers. Our Growth Forecast Based on the Korean financial crisis, the DRAM oversupply situation, findings from our recent visit to Asia for Semicon Japan and our subsequent meetings with numerous semiconductor and semiconductor capital equipment companies, we estimate that semiconductor capital equipment spending growth will be in the 5 percent range in 1998. That's down from our previous estimate of 12 percent. We estimate that Korean investment will decline about 25 percent in 1998, with Japan flat and Taiwan up 12 percent rather than 15 percent to 20 percent. Our U.S. and European estimates remain unchanged. The overall impact of the slower growth rate reduces our 1998 estimated equipment market sales by 6 percent to 7 percent, or slightly less than $2 billion total. Valuation and Investment Opinion We believe the majority of the bad news is already in the stocks. During periods of uncertainty, price-to-sales has been a better indicator than price-to-earnings for this group. On a historical valuation basis, if the group maintains operating margin profitability in the 10 percent and greater range, as we expect it to through 1998 (group average is about 12 percent currently), we don't believe the group will trade much below two times the 1998 market-cap-to-sales. The long-term average price-to-sales has been 2.1 times for the group. Brett Hodess is a managing director and senior research analyst in the technology group at NationsBanc Montgomery Securities. upside.com