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To: Q. who wrote (961)	11/27/1998 5:36:00 PM
From: Ian@SI	Respond to of 3661

John, I didn't look at the 2 10Qs closely, but I think the first one contained an error in one of the financial tables showing $216M revenue for the Epi takeover (Concept?) rather than $16M or something like that. i.e The 10Q-A corrected a typo rather than adding anything material. I also believe that there was a press release which preceded the 10Q amendment. FWIW, Ian.

To: Q. who wrote (961)	11/28/1998 2:10:00 PM
From: Anaxagoras	Read Replies (2) \| Respond to of 3661

I spent a good chunk of time looking at the 10Q but didn't find anything to answer your question about why it was amended. However, I did find something interesting that I'd like comments on as I compared the 10Q to last year's, as well as the 10K. Last year's third quarter 10Q as well as the 10K had an interesting statement in their R&D discussion. Look at this: <<The Company believes that continued investment in research and development, including its multi-product strategy and its 300mm development program, is critical to maintaining a strong technological position in the industry. >> I haven't checked the intervening 10Qs, but now compare the above to what was said in the latest 10Q: <<The Company believes that continued investment in research and development, including its multi-product strategy is critical to maintaining a strong technological position in the industry.>> Notice that the 300mm development program is not mentioned? Is this a cause for concern? Now, put this together with one of the major causes for the gross margin contraction: <<The decrease in margins was significantly affected by a $2.6 million write down of inventory related to the Company's 300mm program. Due to the continued push-out of the industry 300mm requirements, previously inventoried 300mm program materials have been expensed in the third quarter.>> So what's the state of this development program? Well, obviously it's not abandoned, since in their most recent press release (Nov. 16, '98) they mention an acceleration in development of key RTP technologies needed for 300mm processing. Any comments on the change in R&D discussion I noted? And anyone have more insight into what exactly went on with the write down of inventory? Puzzled..., Anaxagoras