Home | Business News | Browse by Publication | F | Fair Disclosure Wire

Varian Semiconductor Equipment Associates Inc. at Barclays Capital Global Technology Conference - Final.

Article Excerpt
C.J. MUSE, ANALYST, BARCLAYS CAPITAL: Good afternoon. My name is C.J. Muse, with Barclays Capital. Thank you for coming. It's my pleasure to introduce Bob Halliday, the CFO of Varian Semi. I will turn it over to Bob.

BOB HALLIDAY, CFO, VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.: Thanks, C.J. I think we have-- What do we have 30 or 35 minutes? We're going to probably do about 20 minutes on canned presentation, and then we can take some questions in the room.

There is kind of-- I'm going to focus a little bit today on the economic leverage. The market share gains have been pretty well documented. As recently as '04, we were 30%. We don't have '08 in there. But we did gain another 4 points of market share in '08, about 68.5%. That was pretty good, particularly in that I thought we had a little bit of market share risk this year because the mix of who was buying. We were particularly strong in Taiwanese share - not as strong as in Japan, where we're gaining share. But the absolute numbers aren't as good. But, despite the mix of customers, we went up 4 points. We gained share in the Japanese market, as I said, where we went from about 15% of that market in '07 to about 27.5% in '08 and, in high energy, where we went from about 13% of the market to 26% of the market. If you exclude those two areas, our share is pretty strong everywhere. Across the whole world in high current, we're about 78%. And we're about 58% or 59% medium current. So our share gains were up another 4 points in '08.

We're actually 6X our nearest competitor. That's interesting math. But it's also interesting-- We have another slide in terms of-- Our funding for R&D is actually bigger than our next competitor's sales of equipment. So we've already got a couple years' lead, and we're extending that lead in terms of products and offerings even more so.

We're investing-- If you looked at R&D spending, in '09, we're trying to scale back some because of the overall conditions. But we've actually increased our spending on new concepts and feasibility growth opportunities. So I think we're getting pretty well positioned for that stuff to grow our addressable market.

A lot of that stuff won't really take fruit or bear fruit, probably, for another year and a half or two because, to turn the needle in terms of revenues, you have to get qualified and then get production tool [buys].

And technology and leadership. We're going to touch on the platform leverage today because people ask me - How much money can you make when business comes back? And I think how we develop and design our products and as a result of our market share gains, we actually have better economic upside in the next upturn. And I can talk to that.

If you segmented the implant market, it's now segmented to the four markets. I don't have the official '08 data, but, in '07, the high-current market was 50% of the implant market. And we-- I think, this year, we're about 78% of that market, which is the biggest. Medium-current in '07 was 34% of the whole market, and we were about 58% of that market-- 57%. High-energy was only 11% of the market in '07, and we're about 26% of that market in '08. And PLAD was 5% of the market in '07. It was probably about 8% or 9% of the market in '08. It was about 5% in '07. And that's noteworthy because PLAD is a new product that didn't exist in any sales the year before, in '06. And...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!