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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Carl Mays who wrote (6308)	8/4/1998 10:32:00 AM
From: Justa Werkenstiff	Respond to of 42834

Carl: Evidently there are a lot of people impressed with ASM's products. Over the past few years, they have grown and taken market share (ASM had just 10% three years ago) to overtake Canon in the number two spot behind Nikon with 25% of total market share as compared to Nikon's 44%. Nikon lost 6% of market share from 50% and there is no reason to suspect that anyone other than ASM took it. I was impressed when CYMI gave a sales breakdown for eximer lasers during their conference call. Year to date, Cymer said that 42% of sales revenue was generated by ASM compared to 27% by Nikon, 21% by Canon and 6% by SVGI. Moreover, 58% of revenues generated by ASM in the first half came from steppers with less than .25um application when compared to 33% the previous year. During the recovery, I expect that ASM will come out of the gate strong and that this trend will continue with ASM leading in DUV. Having said all that, there is no question that on a P/B and P/S basis, ASM is expensive. As you know, ASM gets over half its revenues from Asia. So there is definite risk here. On the positive side, there is no debt and I like ASM's outsourcing policy and ASM has effectively preannounced for the remainder of the year. You have to like CYMI on a valuation basis and as a pure play on DUV, but CYMI is a small cap. ASM was close to a $900m last year in revenue which puts it in the large cap segment right up there with KLAC. I won't insult you with my limited skills in assessing its technology other than to say that it is my understanding that ASM's machines cost more but generate better throughput with lower maintenance costs. Check out their home page and specifically their earnings presentation of late July: asml.com