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To: Doug Skrypek who wrote (14133)	5/28/1998 3:26:00 PM
From: Andrew Vance	Respond to of 17305

AV--NVLS/LRCX/IPEC/KLAC - Just do it seems appropriate. I had to throw in KLAC since AMAT has both Opal and Orbot from last year. This has got to be an option that is discussed amongst these 4 companies. It will probably be the only way they can really effectively deal with AMAT. There would be very limited, if any, overlap of products where they previously competed but there could be a massive amount of cost savings associated with both service and parts relative to the combined entity. I wish I could go back and link you to a post I made previously regarding the subject of this type of merger possibility but I am still trying to catch up on stuff from vacation. I think the monkey wrench for SFAM had more to do with Strausbaugh edging them out somewhere and not as much IPEC. However, as a group, the independent CMP equipment providers like IPEC and SFAM are getting killed with the delayed implementation of CMP across the industry. this has more to do with the delay in full volume production of the 0.25u and below technologies both domestically and at Asian Foundries. Key word here is DELAY. It is only a delay but it is negatively impacting these companies much like the same delays are about to kill CFMT. You could assume that this type of alliance could weaken SFAM relative to IPEC if the merger/alliance activity goes down the road you lay out. The end user wants to deal with a minimum amount of companies for both field service and parts. AMAT has a great competitive edge by providing "one stop shopping" for many pieces of equipment throughout a wafer fab along with the associated 24hr service and parts contracts they sell with those pieces of equipment. From personal experience I can attest to the desire to work with a minimum set of supplier service organizations. Historically I have had a much more successful manufactur9ing experience when I had this broader relationship. BTW-I thought Strausbaugh sneaked in somewhere where either SFAM or IPEC were supposed to be. Andrew