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

To: akidron who wrote (26273)	11/15/1998 5:47:00 PM
From: blake_paterson	Respond to of 70976

akidron: There's still hope for long positions in the facilitators of 0.18mm and Cu: VAN KASPER & COMPANY GERALD S. FLEMING (415) 675-2718 RESEARCH FLASH SUSAN CROSSLEY (415) 675-2717 NOVEMBER 13, 1998 SEMICONDUCTOR EQUIPMENT THE SEMICONDUCTOR EQUIPMENT INDUSTRY Lam Research Corp. Announces New Layoffs; Results Due From Etec, Inc. and Applied Materials, Inc. Investment Conclusion: The American Electronics Association (AEA) meeting was held in San Diego earlier this week. Most firms we met with believe that they have seen the worst order-wise, but remain skeptical on shipments through mid-1999. We note that investors are shaking their heads about the magnitude and swiftness of the recovery. Even though many stocks have doubled in recent weeks, it looks to us as though this sector is (and should continue to be) climbing a "wall of worry". We strongly recommend purchases of Asyst Technologies, Inc. and Lam Research Corp. (OTC:LRCX - $16 7/8, Buy), and would also buy ADE Corp. (OTC:ADEX - $14 ¬, Long-Term Buy), KLA-Tencor, Inc., Nanometrics, Inc. and Novellus Systems, Inc. (OTC:NVLS - $46 5/8, Long-Term Buy). Other positions in the group may also benefit from increased activity in copper technology and a continued need for finer features. During the conference, we met with the following firms -- ASM Lithography (OTC:ASMLF - $27 1/2) Asyst Technologies, Inc. (OTC:ASYT - $17 «) Buy CFM Technology (OTC:CFMT - $10 1/4 ) DuPont Photomasks (OTC:DPMI - $32 1/8) Etec, Inc. (OTC:ETEC - $33 1/8) Hold FSI Int'l (OTC:FSII - $7 1/4) GaSonics (OTC:GSNX - $7 9/16) Genus (OTC:GGNS - $7/8) Intevac (OTC:IVAC - $7 1/2) Integrated Process (OTC:IPEC - $10 15/16) KLA-Tencor (OTC:KLAC - $37 15/16) Long-Term Buy Mattson (OTC:MTSN - $5 15/16) Nanometrics (OTC:NANO - $6 1/16) Long-Term Buy Photronics (OTC:PLAB - $18 5/8) SpeedFam (OTC:SFAM - $18 3/8) Tegal (OTC:TGAL - $2 3/4) Ultratech Stepper (OTC:UTEK - $19 5/16) Veeco (OTC:VECO - $35 1/4) Zygo (OTC:ZIGO - $9 11/16) In our opinion, Asyst remains the best opportunity in the group. Management continues to look for sequential revenue improvement and a book-to-bill above 1:1. In addition, it expects to book two retrofit contracts worth $30-40 million each in the first quarter (or possibly second quarter) of calendar 1999. Unlike new fab contracts in which similar revenues are spread over a 2-3 year period, these retrofits take about 3 quarters -- i.e., add $10 million (+) a quarter. The Company is also bidding on another 10 similar jobs. This is not an insignificant increment for a firm that shipped $15 million last quarter. We still have a $20 per share near-term objective with a next-cycle upside to as much as $40. Nanometrics is seeing lots of interest in its Applied Materials in-line metrology offering and exploring other possible applications (Track and CVD). However, there was no news or catalyst to drive the stock in the near term. IPEC and SpeedFam appear to be struggling vs. Applied. IPEC appears to have the lead in developing a copper tool. The two could make an interesting couple, in our opinion. KLA-Tencor was the one large capitalization firm in attendance. It has great long-term prospects, but sees the next quarter lower -- which is no surprise. ETEC is very positive on its market outlook -- but waffled on questions about near-term order vulnerability. The Company said it will give guidance on its conference call next Wednesday. We note that its bankers' estimates have been slipping; however, with more realistic estimates, we believe that the shares could become an interesting feature size reduction play. There was lots of discussion about a non-attendee, Applied Materials (OTC:AMAT - $38 11/16, Hold). Their earnings report next Tuesday should have a major influence on equipment stock performance. The consensus now appears to have AMAT reporting flat to slightly higher gross orders ($625 million) but a nice improvement in net orders since cancellations shouldn't be much of a factor this quarter. The stock may do better on the basis of copper opportunities and "the bottom is here" phenomenon, but 1999 guidance could be below the current consensus. Yesterday, Advanced Micro Devices (NYSE:AMD - $27 «) told analysts that it planned to be in full production of a copper version of its K-7 microprocessor by the year 2000. We continue to see Novellus (and other stocks) being driven by the emergence of a copper market. Lastly, Lam announced another 500 person layoff yesterday - not new news financially, since a reserve had already been taken.

To: akidron who wrote (26273)	11/15/1998 9:17:00 PM
From: Proud_Infidel	Respond to of 70976

Re:.one thing the Dell report says for sure is that one of the major PC playa's is going to the wall..... and that margins in that biz are gonna get cut finer..... in fact there's going to be no money to be made at all. This is the same tag line we always hear from the Bears: nobody will ever make any money, margins are going to zero yada yada yada. We've heard the same thing for INTC in it's fight with AMD for the segment-zero market. Alas, INTC comes out this week and says its GM will be up about 3 points from last Q's 53%. Before chanting the mantra of "no money to be made at all," please back it up since DELL and INTC are 2 of the most profitable corporations in America, coming up fast on GE. BK