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

To: TI2, TechInvestorToo who wrote (17132)	4/24/1998 8:30:00 PM
From: Czechsinthemail	Respond to of 25960

Is CYMI cannibalizing its own sales? I'm also pleased to report that we are on track to ship the Orion in the third quarter. We expect the Orion, which produces twice the power of the 5000 and the 5010, to redefine what constitutes the competitive, leading-edge excimer laser lithography light source. By combining twice the average power with further refinements in bandwidth, pulse energy stability, and additional cost-of-operations savings, the Orion is expected to effectively enable scanners to increase wafer throughput by approximately 15%. In other words, enabling six lithography tools to do the work of seven. Both the 5010 and the Orion are designed to further widen the gap between Cymer and competitors' attempting to gain a foothold in this market. Given the statements that DUV is expected to move toward scanners rather than steppers and that the Orion can cut the total scanner demand by increasing wafer throughput by 15%, it seems to me that CYMI is not only creating more distance between itself and its competitors but also between itself and itself. The prospect of a more useful and productive scanner in the future may defer the need to purchase DUV equipment now, thereby compounding CYMI's current sales problem during a rough time for the chip companies. It makes sense that customers would prefer to defer to the future when the combination of more productive DUV lasers and perhaps a more favorable market supply/demand situation for chips would be more advantageous. I think in the enthusiasm around news of companies moving toward line shrinkage in their operations many assumed that this would be occurring faster than it seems to be. It now looks like it will be at least 3Q or perhaps 4Q before more substantial revenues and earnings may begin to show up for CYMI. Between now and then, the story is not likely to be earnings so much as the AMAT-style investments that preserve CYMI's technological and production advantages. I'm glad to see CYMI aggressively pursuing these directions, because I think it will pay off big in the long run. But I think pretty much everyone on this board overestimated the speed of major DUV deployment. From here going forward, I think we will be able to forget about short term earnings and focus on the steadily improving big picture. Baird