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To: Jeffrey S. Mitchell who wrote (11580)	2/8/1998 10:37:00 PM
From: Andrew Vance	Read Replies (1) \| Respond to of 17305

AV -- Pobe Cards are testing fixutres for ICs that are manufactured by the IC semiconductor companies. After the ICs are built, they need to go through funational testing and post assembly final testing. This company provides those test fixtures. With the growth he is expecting or with the perceived increase in business, it has to mean that a great deal of replacement fixtures for existing devices are expected (low probability) or that a whole new sets of probe cards are needed for the newly designed devices that are going into production. This could be devices at the same design rule tolerance or the new advanced technologies (higher probability). This news is just one piece of supporting evidence that the design activity within the industry has not slowed down. It may also be a positive indicator that technology is moving forward (design rules and feature sizes) like I have been saying all along. IF we see growth in this area (Wentworth) that must mean we will be seeing new devices, at a minimum and an increase in manufacturing volumes down the road. The follow through to this are the mask shops (PLAB, MASK, DPMI) to provide the new device reticle tooling, the backend end testing systems and assembly systems (KLIC, TER), and the enabling technologies we have previously spoken about. Andrew

To: Jeffrey S. Mitchell who wrote (11580)	2/8/1998 10:48:00 PM
From: Andrew Vance	Respond to of 17305

AV--On the subject of enabling technology: CYMI The Following made it to my mailbox over the weekend and I really cannot find fault with the logic presented. SO, for your viewing pleasure: Subject: S.A.Advisory Recommendation on Cymer,inc, (cymi)--Expanded verbage-Feb 3, 1998 We recommended Cymer, Inc. ( nasdaq-cymi ) on January 31, 1998 @ $16.56/share. The company is the leading provider of illumination sources for deep ultraviolet photolithography systems. The company is a pioneer in the development of excimer lasers, the enabling technology for fabricating the next several generations of leading-edge semiconductors. Cymer lasers are used by the industry's leading stepper and scanner manufacturers as well as the world's top semiconductor manufurers. THE POSITIVES FACTS: 1. Revenues for 1997 Dec ---$ 203,647,000 ----1996--$64,995,000 net income per share diluted .86 vs .29 2. 52-week stock range $14.375------$49.25 3. shares outstanding 30 million. 4. Book value as of January 30,1998-----$4.15--price to book-3.99 5. Price to sale--2.4 6. Price to Earnings =-trailing 12-months---19.2X 7. cash -$132 million and $42 million (long term investment) $174M 8. On or about January 29,1998--CYMI announced $50 million share repurchase program. 9. 1997 net income up 300% on 213% revenue rise!!!!! 10.IPO-September 19,1996--3.4 million shares @$9.50,Secondary December 12,96 2 million shares @ $42.00--during 1997 a $175 million debenture sold and convert @ $43 or so! 11.Product revenues for 1997 reflected the sales of 460 lasers, compared to 145 in 1996.During the fourth quarter, this number totaled 133 laser systems, 131 of which were for use in semiconductor photolithography applications. Gross margins on product sales reached 40%. 12. At year-end backlog was $108,704,000.00 13. Management controls 14%, large short position, recently upgraded by two brokerage firms(Morgan Stanley--bullish firm with clout). 14 Company believes that it controls 90% of it's market. --- According to Independent market analyst, the DUV lithography market is currently projected to grow at a compounded annual growth rate of 28% through the year 2000. 15. According to industry analysts, the worldwide market for semiconductors was $138 billion in 1996. Key to this growth is Moore's Law, named for Dr. Moore, chairman emeritus and founder of Intel.. In 1965, Moore wrote, "the average power and complexity of the silicon chip will double every 18 months with proportionate decreases in cost". As this trend continues, enabling technologies such as deep ultraviolet lithography will be critical to the industry's ongoing success. 16. New products to be released during 1998 that management believes will raise the competitive bar more in a single step than ever before in the history of CYMI. 17. Deep-UV is ranked as one of the fastest-growing sectors in the global lithography marketplace. 17. Possible takeover candidate - 18. During 1996, the company increased its clean room manufacturing space to approximately 11,000 square feet, added twelve new test bays and more than tripled the size of its manufacturing staff. The NEGATIVES: 1. Large exposure to Japan. 2. Some exposure to Asia. 3. Management announced that the first quarter of 1998 will see a 10-15% decrease in sales. 4. Large amount of R and D expenses coming during the first quarter. 5. Most brokerage firms lower earnings est. for 1998 form $1 plus to around .45---I believe that this will change very soon and be upgraded to around .65-.70 for 1998 and over $1 for 1999. 6. The shorts have been hammering this issue to death!!This is going to change real soon! OVERALL OPINION ALL the negatives offer us a prime BUYING opportunity! We love this issue!!We usually stick with value investing and tend to avoid growth! CYMI in our opinion is an exception!! Long term --We believe that this issue has the potential to reach a share price of $50 within a few years..The technology stocks in our opinion became over sold dramatically during the past 2-months of Asian Flu--CYMI in our opinion is a great example of throwing the baby out with the bathe water!! We look for much higher prices near-term!!( $21 should be easy). All the negatives in our opinion are all temporary--offering us a window of opportunity!! Finally, The greatest risk in CYMI in our opinion is not owning some! We intend to monitor this situation in our model portfolio for % gain performance. Corporate phone# 619-451-7149 E-mail---------lcole@cymer.com Website--http://www.saadvisory.com