Maxwell, thanks for the great referee job on the earnings contest, it was entertaining.
An interesting ASMLF/DUV and ergo CYMI article:
Message 3317231
After several strong years, demand for chip equipment is cooling off.
But companies are still developing the next generation of more powerful and expensive memory chips. And
just how deep this year's equipment downturn might be is hotly debated.
That's why ASM Lithography Holding N.V., which manfactures chip-making equipment, believes it can buck
the downward trend by grabbing market share - as it has before.
''There's no question,'' said John Geraghty of CS First Boston Corp. ''They will do it.''
ASM makes wafer steppers, the cameras used to imprint complex circuit patterns on silicon wafers. It does all
of its production in Holland, though it has 18 sales and service sites worldwide.
Demand for steppers grew to some 1,400 machines in 1996 vs. roughly 1,225 in 1995, says Clark Fuhs,
principal analyst at the research firm Dataquest Inc.
But this year that market could fall to about 850 steppers, Fuhs says.
The market consensus, however, is between 950 and 1,000 machines. Some analysts, like Geraghty, think
demand could be higher.
If demand reaches 1,000 steppers, ASM should sell about 215 machines, Geraghty says. Most sales should
come after June on stronger chip demand, some analysts predict.
But the chances for that improvement are open to debate.
''The chip industry wants to believe in a recovery in the second half,'' Fuhs said. ''We don't see it.'' There's
simply too much capacity, he says.
ASM and market analysts think Dataquest's estimates are too low. ASM officials, though hopeful, are biting
their nails.
''We know the last six months will be tough,'' said Eduard Hoeberichts, manager of investor relations.
''We'll be flexible adapters.''
This year's ray of hope is the growing market for deep-ultraviolet steppers, a new segment for ASM.
Deep-UV technology sends shorter wavelengths of light through the stepper for higher resolution. That's vital
for making 256- megabit dynamic random access memory chips and some microprocessors.
Deep-UV also can let chipmakers produce 50% or more chips per wafer. That helps cut costs - a key concern
today.
As a result, the global demand for deep-UV steppers should rise this year to 219 from 107 last year, Fuhs
says. ''Many companies have plants that are underutilized,'' he said, ''and they want to upgrade them with the
newest equipment.''
The new steppers don't come cheap. ASM's deep-UV machines sell for $6 million compared with $3.5
million to $4 million for some earlier machines, Geraghty says. The company could sell 70 to 80 deep-UV
steppers this year, analysts say, up from eight last year.
The global stepper market was worth about $3.8 billion last year, according to Dataquest. Nikon Corp.
captured 47%. Canon Inc., another Japanese firm, was No. 2 with 27%.
ASM came in third with 19%. Two American firms - Silicon Valley Group Inc. and Ultratech Stepper Inc. -
accounted for most of the remaining share.
Dataquest expects the stepper market to slip to $2.6 billion in '97.
In the weaker market, rivals will be as eager as ASM to ramp up deep- UV sales. Market leader Nikon, for
instance, started shipping these steppers about a year ago; ASM launched its deep-UV steppers in August.
On the other hand, Canon is not set to ship its deep-UV machines until this spring, Geraghty says. Ultratech
Stepper, which reported its first sales decline Thursday, does not make deep-UV steppers.
Some analysts are confident ASM will gain market share this year, chiefly from Canon.
''ASM sells more productivity-oriented products than leading-edge technology,'' said Robert Maire of
Donaldson Lufkin & Jenrette Securities Corp. ''They are known as the makers of work-horse devices,'' he
said, which clients buy because of their top-rate efficiency.
In some parts of Asia, recent sales of ASM steppers have been quite strong. Clients include Korean
chipmakers such as Samsung Electronics that want a non-Japanese source of steppers.
Things could improve in Japan as well. To date, ASM has failed to break into this market. But it now has a
unit of chipmaker Hitachi Ltd. as its sales representative there, ASM's Hoeberichts says.
ASM should sell 215 steppers worth $930 million this year, analyst Geraghty says. That would give it a
growth rate of 21% this year compared with 45% last year. However, it could capture one-third of the
deep-UV market and one- fifth or more of the total stepper market worldwide, according to his estimates.
For the six months ended Dec. 31, net income rose 33% to 117.3 million Dutch guilders (about $68 million)
from 88.37 million guilders a year before. Earnings per share grew 26% to 3.39 guilders from 2.70 guilders
on 6% more shares outstanding. Sales were up 35% to 733.8 guilders (roughly $420 million) from 544.7
million guilders.
The stock, priced near 73, trades by ASMLF. |
