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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (20521)	12/30/1998 11:23:00 AM
From: derek cao	Respond to of 25960

From IBD: Chip Gear Looking Chipper Equipment Makers Primed For Growth Date: 12/30/98 Author: James DeTar Computer chip sales have risen in recent months. Can sales of the equipment used to make chips be far behind? Semiconductor equipment sales were down for most of '98, but a late-year uptick indicates things are looking up for '99, analysts say. ''We are definitely in recovery. We have been since October,'' said Dan Hutcheson, president of San Jose, Calif.-based market researcher VLSI Research. ''Everyone since just before Thanksgiving is saying we're past the bottom.'' Hutcheson says that in a recovery, chipmaking equipment companies initially lag behind the actual chipmakers themselves. Then things turn around and they take the lead. ''The equipment companies will lag while the chip manufacturers are still thinking they are in the middle of it. But in an upturn, the chipmakers will move to an aggressive buying mode to lock down deals,'' Hutcheson said. This opens opportunities for chip companies that want to buy deeply discounted equipment, he adds. ''You can buy state-of-the-art equipment today at 30% off sticker,'' Hutcheson said. They'd better hurry, though. Industry watchers say they already see an equipment shortage looming on the horizon. One indication is that business is picking up at Applied Materials Inc., the industry's largest chip equipment maker. ''Business is doing reasonably well for most of the companies now. Applied is hiring again. In fact, they are starting to worry about how they are going to find enough skilled people,'' Hutcheson said. ''Right now you can get real good deals on equipment. ''But that will change quickly,'' Hutcheson said. ''No one wants to be the last one out there to buy equipment when there is a shortage in the second half of 1999. Some people say it will happen by mid-summer. We see a shortage developing by mid-'99 to the fourth quarter.'' Dick Greene, manager of market statistics for the industry group Semiconductor Equipment and Materials International, agrees the equipment market is on the upswing. He says until excess manufacturing capacity is absorbed, chipmakers won't build many new factories. There eventually could be an equipment shortage, but that should be further out, Greene says. ''We believe the order rate for equipment will continue to improve,'' Greene said. ''What we expect is there won't be too many new factories built. This is because there is excess capacity out there. I don't know when the excess capacity will be used up. We think it will be the end of the year. When it's used up, we expect people will build new factories.'' When they do build, it will be cheaper to do so than it would have been a few years ago. One side effect of the equipment price slide is that it has brought down the cost of a new chip fabrication plant, which had risen to $1 billion-$2 billion per plant. ''The $1.3 billion fab of two years ago you can get for $800 million or $900 million today,'' Hutcheson said. ''But people will raise prices again. Historically, equipment prices have risen 13% a year.'' This steeply-rising cost of equipment also has cut down on the number of new chip plants built every year. ''In the old days we built fabs at the rate of a couple hundred a year,'' Hutcheson said. ''Now we build 20 a year.'' -------------------------------------------------------------------------------- (C) Copyright 1998 Investors Business Daily, Inc.

To: Zeev Hed who wrote (20521)	12/30/1998 11:25:00 AM
From: Proud_Infidel	Read Replies (3) \| Respond to of 25960

Zeev, Re:I also think that CYMI must broaden its base to assure that technological changes do not threatens its existence (I see no threat in the next three years at least, but corporate chieftains should think in term of 5 and 10 years), without a strategic vision of long term viability, the market enthusiasm for CYMI may not be there three years down the road. This is the area of uncertainty I have always had with this stock. No matter what its near-term possibilities are, WSmay look towards the distant future when CYMI's products are no longer needed. BK