What Does Applied Materials Tell Us? Where Is The Semiconductor Capital Equipment Industry Today? INFRASTRUCTURE Discusses Market.

DALLAS--(BUSINESS WIRE)--Nov. 25, 1996--INFRASTRUCTURE, the leading electronic financial publication covering the semiconductor industry, can help answer these questions.

"Billions of dollars were wagered in stock transactions last Friday but the semiconductor capital equipment industry is not totally out of the woods yet," said Carl Johnson, Director. "It's important for investors to consider the broader picture before they choose companies for investments."

Analyst reactions to fiscal fourth quarter earnings from Applied Materials and forward looking statements from the company served as the catalyst for the sector move Friday. The company expressed optimism that it could further its competitive position vis-a-vis competitors during the remaining downturn while at the same time, seeing its gross margins increase. A considerable number of analysts upgraded their rating on the company and though some qualified their remarks, it is now widely believed that the industry has hit bottom. Still, Applied noted that the outlook as late as the last half of 1997 remained "uncertain."

Applied Materials offered guidance for the coming fiscal year, estimating EPS of $1.80 to $1.90. Although most Wall Street analysts are not venturing far from this guidance for their 1997 estimates, a wide divergence emerges for earnings envisioned in 1998. This is not surprising given the degree of uncertainty in the semiconductor capital equipment marketplace.

Johnson noted: "It is a fact that the sector is rallying nicely, but many companies will be reporting earnings over the next couple of quarters that will be well under previous periods. When approaching investment possibilities in the semiconductor capital equipment arena, investors should hunt for companies that serve strong market segments or have leading technology - i.e., leading edge companies.

"Applied Materials qualifies and we will once again profile the firm in detail in next month's issue. But we believe there are opportunities for greater capital appreciation in many smaller firms and in some cases, it is possible to find firms whose businesses will be somewhat insulated from the remaining difficult months ahead."

Refer to the data in the table to see just how widespread the sector move was, with price increases ranging from 2 to 27 percent. The notion that the industry hit bottom electrified Wall Street. But hitting bottom and growth are quite different.

"At this stage of the industry cycle, considerable excess capacity still remains and this factors in the timing of the next major order ramp," noted Ron Leckie, Research Analyst and Contributing Partner. "I believe we are nearing the end of over-capacity in test and assembly. Less capacity was built in the `back-end' market during the expansion and we are seeing a pick-up in orders and quote activity in this segment. Yet even though it does appear that we are at a bottom for the overall industry, a wholesale recovery will still take some time, perhaps more time than many investors and analysts expect."

Exemplary to its strategic approach, INFRASTRUCTURE has remained very bullish on the fab automation sector. "On Friday, PRI Automation (PRIA: NASDAQ) traded just shy of its fifty-two week high despite the long sector downturn," noted Johnson.

"As the downturn began, we remained steadfast in our belief that companies providing tools to improve the productivity and efficiency of existing semiconductor manufacturing facilities offered reduced risk while maintaining exceptional opportunity for long-term return. PRI Automation is a very good example. Going forward, investments in leading-edge companies with strong positioning in their respective market segments is the best recipe for successful investing in leaner industry times."

INFRASTRUCTURE now allows individual investors, industry managers and analysts access to its publications on a trial basis. For a two week period, one monthly letter and industry-acclaimed "Daily Notes" will be made available, free of charge for individual delivery via e-mail.

"We are widely recognized as a leading voice in the semiconductor capital equipment industry," noted Johnson. "Given where the market is today, we feel it is important to extend our trial program so individual investors, industry managers and analysts can sample our analysis of the market."

More information about INFRASTRUCTURE and the trial program is available at the following world wide web homepage: http://www.infras.com.

Individuals may sign-up at the home page or send their requests to: [e-mail] -0-

                SEMICONDUCTOR EQUIPMENT MANUFACTURING
                        COMPANIES, 11/22/96

                               CLOSE    CHANGE  CHANGE
COMPANY               TICKER   FRIDAY    ($)     (%)       VOLUME

AG Associates          AGAI      6.00    +0.50    9.09      77,800
Applied Materials      AMAT     38.63    +6.63   20.70  25,978,300
Aseco Corp.            ASEC      9.13    +1.50   19.67      92,200
ASM International     ASMIF     10.38    +1.38   15.28     747,300
ASM Lithography       ASMLF     45.38    +6.13   15.61   1,023,900
Asyst Technologies     ASYT     19.00    +1.75   10.14     242,900
Aetrium Inc.           ATRM     13.00    +2.38   22.35     230,600
Brooks Automation      BRKS     14.13    +1.13    8.65     200,300
Cognex                 CGNX     18.75    +3.25   20.97   2,797,200
Cohu                   COHU     22.25    +2.25   11.25     316,400
Credence Systems       CMOS     20.00    +2.56   14.70   2,395,900
Electroglas            EGLS     19.00    +0.75    4.11   1,672,800
Etec                   ETEC     27.50    +0.63    2.33     300,000
FSI International      FSII     15.13    +2.63   21.00   2,066,200
Fusion Systems         FUSN     19.25    +1.25    6.94     257,000
GaSonics Intl.         GSNX     10.38    +2.13   25.76   1,092,800
Genus Inc..            GGNS      6.63    +0.63   10.42     478,900
Helix Technologies     HELX     30.13    +2.13    7.59     285,500
IPEC                   IPEC     17.38    +0.75    4.51   1,897,400
Kulicke & Soffa        KLIC     20.88    +0.38    1.83   1,685,800
KLA Instruments        KLAC     38.50    +5.25   15.79   8,065,900
Lam Research           LRCX     34.06    +4.56   15.47   6,130,600
LTX Corp.              LTXX      6.69    +1.00   17.58   5,185,600
Mattson Technologies   MTSN     10.50    +1.75   20.00     589,900
Novellus               NVLS     59.75    +9.77   19.54   4,613,100
Opal                   OPAL     12.13    +1.63   15.48     642,700
Photronics             PLAB     29.25    +2.75    8.33     457,100
Plasma and Materials   PMAT     14.75    +1.75   13.46     126,000
Plasma-Therm           PTIS      3.75    +0.56   17.65     165,300
PRI Automation         PRIA     43.13    +6.63   18.15     869,200
RVSI, Inc.             ROBV     12.63    +1.13    9.78     142,700
Semitool Inc.          SMTL     10.88    +1.88   20.83     185,300
Silicon Valley Group   SVGI     21.88    +2.38   12.18   3,232,300
SpeedFam Intl.         SFAM     23.31    +2.94   14.42     791,400
Tencor                 TNCR     27.00    +5.75   27.06   6,116,100
Teradyne                TER     24.25    +2.75   12.79   3,170,700
Ultratech Stepper      UTEK     24.13    +3.00   14.20   3,356,100
Veeco Instruments      VECO     17.50    +3.00   20.69     414,200
Watkins Johnson          WJ     25.75    +1.88    7.85     271,000

About INFRASTRUCTURE:

INFRASTRUCTURE is the flagship electronic publication of WIPNET, Inc., a Texas corporation. The INFRASTRUCTURE staff includes three semiconductor industry veterans with a combined experience base of over 75 years in hands-on through executive positions within the industry. INFRASTRUCTURE provides private consulting services on the semiconductor and semiconductor capital equipment industries and publishes "INFRASTRUCTURE" monthly, along with "Daily Notes" encapsulations on the semiconductor and technology markets.

INFRASTRUCTURE collaborates with VLSI Research Inc., adding analysis to "Industry Pulse," a continuously updated "Data Packet" containing a quantitative review of the semiconductor industry. INFRASTRUCTURE publishes "Industry Pulse" electronically.

Sample publications are available at http://www.infras.com and weekly articles are also available at CMP Publishing's leading technology supersite, "techweb," at http://www.techweb.com/investor/mavens/semicon/semicon.html. -0-

Note to Editors: "DataPacket" is a registered trademark of VLSI Research, Inc. All publications herein are bound by copyright and trademarks apply.

CONTACT: WIPNET, Inc. (d.b.a. INFRASTRUCTURE)

Carl Johnson, 972/492-7208

[e-mail]

http://www.infras.com

or

Ron Leckie, 408/255-0853

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