Seeking Alpha: With Minimal Guidance, Ultratech Left Groping In The Dark

The last year hasn't been particularly kind to most semiconductor equipment companies, but Ultratech (NASDAQ:UTEK) has fared among the worst as the company has come up far short of the expectations that the company's laser spike annealing tools would play a significant role in the migration to 14nm/16nm FinFET chips at major manufacturers like TSMC (NYSE:TSM), Intel (NASDAQ:INTC), and Samsung. While emerging opportunities in advanced packaging, inspection, and atomic layer deposition take away a little bit of the sting, it hasn't been nearly enough to maintain the prior outlook.

Management hasn't been much help, as the guidance on the last couple of calls really hasn't shed much light on the outlook for the company's tools. I do not believe that management is misleading or withholding information from investors, but the lack of visibility in the market is a definite risk factor. So too is the risk that the company has lost enough share to companies like Screen Holdings (OTC:DINRY) and Mattson (NASDAQ:MTSN) that it threatens the basic thesis that Ultratech's tools offer much-needed advantages in performance.

There is a chance that Ultratech can support a higher valuation largely on the basis of its opportunities in advanced packaging, and the company's cash-rich balance sheet largely takes survivability off the table as an issue. Unfortunately, the lack of traction and visibility in thermal processing makes this more and more of a gamble/speculation than a real investment.

Continue here:
With Minimal Guidance, Ultratech Left Groping In The Dark