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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Fortinwit who wrote (25267)	10/13/1998 7:36:00 PM
From: Justa Werkenstiff	Respond to of 70976

Robbie Stpehens re NVLS: .Book-to-bill ratio was below 1 for the quarter, yet it is our belief that the company rejected the opportunity to significantly increase the quarter's bookings because of the substantial price concessions that would have been required. We were pleased to see the company hold firm in pricing by offering increased value in the form of productivity enhancements. · Looking ahead, we expect the company's Q4 book-to-bill ratio to achieve or exceed parity on flat revenues. We believe the company is seeing strength in all regions, which, in our opinion, is being driven by its advanced technology product portfolio and across-the-board customer interest in copper. · DSOs grew from 98 days to109 days due to extended collection cycles for Asian accounts. The company emphasized that extended payment terms due in Q3 were made on time in accordance with contracts. Furthermore, we believe that Novellus is not alone in offering modified terms, especially to Korean customers and believe that DSOs were in line for current industry conditions. The “King of Copper” Continues to Expand Presence in the Industry · Shipments for SABRE, Novellus' copper plating system increased in the quarter, and the company also shipped its first revenue-generating INOVA physical vapor deposition (PVD) system for the barrier and seed layers that are part of the copper process. · Although the company declines to delineate revenues by product line, we believe it is rapidly gaining share in the copper interconnect market with the SABRE system. Our sources indicate that the SABRE produces a highly uniform copper film, which is critical in facilitating an efficient and lower cost chemical mechanical polishing (CMP) process. · We believe that interest in copper is accelerating, fueled by the news that IBM (IBM -$132) has distinguished itself as the first chipmaker to ship devices with copper rather than aluminum interconnect (i.e. wiring). Moreover, IBM announced that it uses the Novellus copper process. Specifically, copper offers a compelling combination of higher speed and lower power consumption coupled with overall lower processing costs than the aluminum interconnect it replaces. In the difficult semiconductor market, we believe that chipmakers are working aggressively to bring copper into production in order to enjoy the higher ASPs that typically accompany early introduction of next generation products. · In our opinion, copper offers logic manufacturers not only the option of higher speed devices, but also the alternative to reduce power consumption, which we believe to be an attractive feature for laptop/palmtop computing and wireless communications. Although copper is typically associated with logic chips, it is our view that some DRAM manufacturers are also pursuing copper in order to reduce the number of layers of metal interconnect, hence decreasing cost. · Another benefit for advanced memory manufacturers is that copper can be used as an enabling technology for memory devices with onboard logic for graphics applications. · Not only are logic and some memory manufacturers aggressively pursuing copper, but we believe that foundries such as TSMC (TSM-$12 11/16) and Chartered Semiconductor are developing copper processes in order to compete with IBM's foundry business.