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

To: Carl Mays who wrote (2390)	4/26/1998 9:10:00 PM
From: Justa Werkenstiff	Respond to of 3696

Carl: Excellent post. I don't know enough about ISI at this point to give any valuable insights into Art Z's thinking beyond speculation. All I know is when everybody was laughing at Lepton's old e-beam technology, Art snapped it up because he found people on his staff who worked with it in a previous life and thought is was a viable business opportunity that could not be passed up for something like $3m. They improved that old machine ten fold and shipped their first unit to PLAB recently as you probably know. The purchase makes sense to me on one level. I had been advised by UTEK that if the industry went into a downturn, Art Z. would be out at garage sales with his checkbook and his $8 per share cash. A buyback was not in the cards. So for the moment, while I understand why your three scenarios have you concerned (will UTEK become the island for misfit toys <g>), there very well could be a fourth or a fifth that only Art Z. and his close associates know about. I doubt Art Z. is about to show his all his cards until the deal is done. I will wait until the announcement before forming any opinion. But being the paranoid guy that I am, I have to wonder out loud if one of the reasons some shorties played this stock was because they knew about the deal and thought it sucked and would drive the price lower. It has not happened yet as the price has appreciated nicely recently. Moreover, if shorty did know, you could bet your bottom dollar he and his buddies would be all over the media spinning tales of gloom and doom in order to drive the price lower. We have heard nada from the short side. All they have been doing recently is covering. Come to think of it, I hope I have not given shorty any ideas <g>. I will contact UTEK IR Monday and attempt to solicit comment unless someone beats me to it.

To: Carl Mays who wrote (2390)	4/26/1998 9:34:00 PM
From: Cary Salsberg	Respond to of 3696

Carl, I have read your recent posts on the General Lithography and Ultratech Stepper threads and I appreciate your sharing of technical knowledge of the stepper industry and ISI and UTEK. I will address your request for "comments relative to the investment aspect of this company." UTEK has not been on the cutting edge of lithography and their past success in carving out markets has been based on their competitors disinterest in some "lower" tech markets and their own ability to successfully address cost of ownership issues. It is not surprising that they have been adversely affected by industry slowdowns or more adversely affected than other stepper companies. Most equipment purchases since the summer of 1995 have been technology purchases to shrink line widths and these have the side effect of also being capacity enhancements. Cost of ownership ceases to be an issue in a slowdown. Also, it is not surprising that a slowdown has prompted UTEK's competitors to divert some underutilized resources to enter UTEK's markets. It seems obvious that UTEK will continue to suffer as long as the industry slowdown continues. It also seems likely that an industry resurgence will cause customers to rethink cost of ownership and competitors to refocus on leading edge tools. I believe that UTEK is expected to come through the downturn with its cash and book values prettty much intact. As such, it is still a value stock at less than 2 times book and ~ 3 times cash. The key uncertainties about UTEK's future when the industry recovers are the extent of its potential stepper markets as line widths shrink away from its tools and the potential success of its tools in disk head, micro-machining, P-Gild, and electron beam. There is a strong track record to support the belief that UTEK management will continue to produce results above the industry average with this extensive portfolio of products, but I agree that UTEK is more speculative than some of the bigger mainline equipment companies. In summary, I would like you to rethink your expressed concerns and decide if they are more relevant for this downturn than the coming recovery. Also, I would appreciate any insight you may have about the technical capabilities of UTEK's portfolio of products and what kind of successes you would predict for them during the next industry upturn. Thank you. Cary

To: Carl Mays who wrote (2390)	4/27/1998 1:12:00 PM
From: David Aegis	Read Replies (1) \| Respond to of 3696

Carl, Does ISI have any of the patents/proprietary processes used for Scalpel, or are they all owned by Lucent Technologies with ISI just being subcontracted by Lucent as a manufacturer? Also, do you think UTEK would be able to convert ISI's low end stepper customer base to the UTEK Titan series? UTEK is a perennial VLSI "Top Ten Supplier," and therefore might be able to address some of the service problems that you note with ISI. Thanks for your input to this thread. --David