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Technology Stocks : PRI Automation (PRIA) -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (624)	2/27/1999 6:37:00 PM
From: Berk	Read Replies (1) \| Respond to of 1214

Ian, I agree with what you say completely. However, I respect their size in the market nonetheless and that they will dominate in the short term which in turn can determine the intermediate term. Ultimately the fundamentals will prevail but in the meantime it can be uncomfortable.

To: Ian@SI who wrote (624)	3/3/1999 9:38:00 AM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 1214

for what it's worth, PRIA is online investor's stock o' the day. ----- PRI Automation The Safer Wafer Mover March 3, 1999 - Chip equipment stocks are reeling amid worries about slowing PC sales. PRI Automation (Nasdaq:PRIA) is down $16 or nearly 40% in the past month, to $28.44 currently. Many industry experts are still very keen on the outlook for chip equipment stocks, though, and some are calling the recent pullback a rare buying opportunity. Semiconductor equipment is a nortoriously [sic] cyclical industry, so for investors it all boils down to where we are in the cycle. PRI Automation makes systems that automatically transport silicon wafers through the semiconductor manufacturing process. It may sound like a mundane task, but as chips and the chip-making process become increasingly complex, the efficiency of material transport becomes a major variable in the profitability equation for manufacturers. With the new 300-millimeter wafer configuration, each wafer typically goes through 500 process steps and 300 different process tools, so the faster (and safer) it gets through all those steps the better. In the old days (the eighties), wafers were smaller and could be transported manually from one process tool to the next. As the industry moved to larger wafers, the weight and value of a stack of wafers (carried in cassettes of 25) became too great to trust to humans. Furthermore, inefficiencies in the flow of wafers through the fabrication process left valuable chip-making equipment sitting idle half the time waiting for materials or operators. With the cost of many machines in the tens of millions, manufacturers realized they want them operating as much as possible to maximize the return on their investment. As chip makers jumped on the automation bandwagon, PRI stepped up to become the dominant player in material transport automation. Sales exploded from $19 million in 1993 to $213 million by 1997 (figures are fiscal year ending in September). Then the Asian crisis sent the chip equipment industry into a nasty slump last year, causing a drop in revenues to $178 million and resulting in hefty losses for PRI. The industry began to see signs of improvement in late 1998, and in January PRI's chairman Mord Wiesler said "We expect 1999 to be the year of the long-awaited recovery. The semiconductor industry's book-to-bill ratio has improved for the past three months, and we are beginning to see an increase in requests for proposals from our customers. These are encouraging signs and indicate that the industry may be moving toward another growth phase. The cyclical downturns have always been followed by upturns fueled by growing consumer demand for new and innovative products, which result in an increased need for semiconductors. It looks like the industry is moving down that path once again." The market for transport automation systems in particular is expected to really take off in the next few years as the chip industry transitions from 200-millimeter (8-inch) wafers to 300-millimeter (12-inch) wafers. PRI says a typical order for a 200-mm fab (chip fabrication site) is $5 to $15 million, but they expect 300-mm fabs to produce orders of $30 to $50 million. That, in a nutshell, is why the long-term outlook for chip equipment companies like PRI is so exciting. The promise of a cyclical upturn for the industry was well anticipated by Wall Street, igniting the beaten down chip equipment stocks last fall. PRI Automation went from $10 in October to over $44 last month. So while the recent retreat below $30 is a big move, it gave back but a fraction of the rebound since October. In terms of where the chip equipment industry is in the cycle, most everyone agrees it is still in the early stages of a recovery. The current concern about a slowdown in PC sales is probably not a serious issue for the chip equipment companies unless the slowdown becomes severe and protracted. For investors, one thing to keep in mind is that the chip equipment stocks have already rebounded so dramatically since October, so the cycle in their stock prices is a little further along. investhelp.com