Build It and They Will Come
Legacy Systems Builds Another Wetstation for Tyco InternationalAsk a group of leading analysts about their 2008 semiconductor industry outlook and the responses will likely be all over the board.
On one side, you have the doom & gloomers of the opinion that there is simply far too much economic uncertainty in today's world to warrant blue sky in '08. On the other hand, some would argue that rising International demand and the rapid emergence of solar applications that require the use of silicon wafers are offsetting problems brought on by a weakened U.S. economy.
Always in Demand
Luckily, for one of our newest portfolio companies, Legacy Holding Inc. (OTCPK: LGYH), it doesn't seem to matter much. Legacy's patented, award-winning processes provide such a massive value-proposition to the semiconductor industry, in addition to many others including Solar Cells, Flat Panel Displays, and Light Emitting Diodes (LEDs), that their products are in demand whether broader market conditions are favorable or not.
Tyco Orders More
LGYH is out with some major news this morning regarding another order from Tyco for the company's patented DryZone Hydrophilic: Hydrophobic Wafer Drying System wetstation. If you don't know already, Legacy has developed business relationships with Tyco, Micrel Systems, and Silicon Genesis, the largest semiconductor equipment manufacturer and the largest solder bump deposition manufacturer worldwide. Not bad for a company that just began trading a few months ago, eh?
The only semiconductor-related company to ever win the prestigious U.S. EPA 'Green Chemistry' Award, Legacy's technology demonstrates a significant value proposition for the $7 billion per year silicon wafer cleaning industry in 4-industry key ways:
- Improving wafer processing time by 200%;
- Enhancing oxide removal control by 92%;
- Decreasing costs by 22% by reducing the amount of consumable materials used in wafer cleaning; and
- Reducing particles left on the wafer after cleaning by 76%.
So, clearly the company's offering is an ideal fit for target customers regardless of the current economic environment, to a major extent, because of the offering's proven ROI capabilities.
More on the Tyco Deal
In my opinion, the re-order from Tyco is major testament to the capabilities of Legacy's products and technologies. According to today's release, the relationship has been in place since 2003 when Tyco first evaluated Legacy's proprietary processes and has led to two orders for the company's DryZon Hydrophilic: Hydrophobic Wafer Drying System.
In addition to being a leader in the semiconductor space, Tyco is also an ideal business partner for just about any organization under the sun. The company did more than $19B in sales during 2007, has nearly 120,000 employees worldwide, and has billions to spend of R&D and sales/marketing. Tyco is also well-known for scooping up promising comrades, sometimes at a premium, and reaping the rewards of their innovative expertise.
With a highly-esteemed development team in-house and the budget in place to build and buy the best manufacturing solutions in the world, Tyco's decision to align itself with Legacy speaks volumes for the company's credibility and the capabilities of its solutions. This is very impressive for a company at its stage. Don't forget as well that Legacy also sold one of its robotic wet process benches from Micrel Semiconductor and and had a reorder from Cree.
Demand is rising and the company's products are indeed proven. I'll be curious as to what type of effect this growing demand will have on the company's appeal to the likes of Tyco and others from a buyout perspective.
Analyst Sentiment Varied on 2008 Semiconductor/Silicon Wafer Growth
The Good:
Market research firm Semico Research Corp. (Phoenix) has issued a study of the supply of polysilicon and silicon wafers, predicting that demand for silicon wafers for semiconductor production will grow at a compound annual growth rate (CAGR) of 13% over the next five years.
The Bad:
"Pardon my pessimism, but I see zero (that's 0!) growth for semiconductors in 2008 over 2007. Going into 2008, there are some bad signs: the subprime fiasco, soaring oil prices and a U.S. presidential election that could bring more uncertainty to the party." - Mark Lapedus - EE Times
The Ugly:
To tell you the truth, we don't see any ugly here. . .
LGYH is green
LGYH is high tech
LGYH does it better
More on the Stock
Shares are up nearly 100% since our 2/8 update and settled into the $.80 range Wednesday after hitting a recent high of $.92 on 2/25. As mentioned in our last edition, the one dollar mark as well as recent highs of $1.10 and $1.43 look to be easily reached near term targets. With such positive news out this morning, I am very curious to see where LGYH lands at the end of today's trading session.
Labels: Cree, Green Chemistry, Legacy Systems, Micrel Systems, Silicon Genesis, Silicon Wafer, Solar, Tyco International
posted by "Staff" at
1:43 PM
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