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Technology Stocks : Ultratech Stepper -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Firth who wrote (2363)	4/23/1998 5:14:00 PM
From: David Aegis	Respond to of 3696

Conf. Call Notes: Replay at 1-800-633-8284 Code #4092569. The Good: 1) Ultrabeam--"Generating significant excitement" per Art Z. Multiple demos to various third party and captive mask shops. Quality at .25 micron better than seen with competitors' machines. Speed better than ETEC's laser-based machines (which are designed more for speed than mask quality). End users have made favorable comments about sample masks placed into production lines. 2) Stepper Machine Vision and Overlay Features--Recently added upgrades will allow mix-and-match of UTEK's workhorse steppers for an increased number of non-critical layers. 3) ASML "Special Applications" Division/Competitive Incursion in non-critical i-line segment--Art said UTEK had a better ASP/product performance/bang for the buck and that he thought ASML made this announcement more to try to work down some excess stepper inventory than to make the R&D effort to develop a truly competitive product geared specifically for mix and match. 4) Pockets of Strength in Disk Drives--Orders from MR and GMR manufacturers (not specifically identified on the call, but I believe them to be IBM, TDK and Yamaha), were strong, but not strong enough to overcome the general industry malaise. 5) Japan--Art talked a lot about seeing quote and evaluation activity in Japan for everything from machine vision steppers and MR/GMR disk drive equipment to Ultrabeams. The Bad: 1) Verdant--Efforts are being made to integrate P-Gild machines into customers production lines. This integration effort is taking longer than expected. P-gild shipments have been pushed back, possibly beyond 1998 altogether. Art was a bit defensive, I thought, on this issue. He did say that Verdant was generating high levels of interest and that they had a machine that worked...just not, I guess, working at a good enough degree of integration for any of the machines to ship. 2) Delays on Breaking Ground at new facility for Ultrabeam and Verdant--They have built clean rooms at their existing facility instead, since slack demand for steppers allows some extra room in the near term. Groundbreaking pushed back until sometime in 1999. 3) Weak Demand for Existing Semiconductor and Disk Drive Products--Micromachining demand is O.K., but not enough to pick up the slack. Limited visibility. Art thinks disk drives might turn around by the end of 1998. DRAM's might turn around in 1999, and microprocessor/logic will depend on PC demand and box builder transition to a build to order model. My impression was that Art expects the disk drive business would turn before the semiconductor business. 4) Book to Bill--One cancellation, one push-out. B2B was above parity before the cancellation, or below parity taking into account the concellation. The Ugly: Some might feel what I have characterized as bad is truly ugly. I was personally the most disappointed with the Verdant news. I thought about calling it ugly, but I opted for calling it bad. --David