[This column was edited on 12/17/03 to correct the characterization of the licensing discussions between Ibis and IBM. The Motley Fool regrets the error.]
Little-known Ibis Technology
Semiconductor makers often purchase wafers from others, and Ibis supplies both wafers made with a new technology and machines to make the wafers. To put it more technically, the company makes SIMOX-SOI (separation by implantation of oxygen, silicon on insulator) wafers and sells the $8 million i2000 oxygen implanters for making them.
The company said in a prepared statement that its sales of silicon wafers to chip makers would also be down because its largest customer -- not named but known to be IBM
Hmm. Might this really be about ongoing negotiations between Ibis and its No. 1 customer over licensing concerns? AmTech analyst Bill Ong to Dow Jones speculates that Ibis' expected implanter sales this year to a customer other than IBM -- which would naturally be good news -- are being pushed into 2004 because of the negotiations. Ong was also reported to say that "I think, obviously, that people are concerned about the delay from December to January, but I think it's important to see the broader perspective," he said, adding, "whether the orders get pushed out a month here, a month there, it really isn't material, because you are seeing increased interest in this technology."
But any delays understandably make investors skittish about a company with new technology like Ibis. Many are not comfortable with the promised next thing in semiconductor manufacturing when a company goes year after year with no profits or free cash flow and sales that bungee-jump quarter to quarter and rely on one major -- albeit powerful -- customer. Given the stock's rise from a $3.92 low last fall to as high as $17.90 this year, deflation on this news is no surprise.
SIMOX-SOI may be the coming thing, but it's a high-wire act for investors right now. Go there only with mad money and the firm belief that the sales and proliferation of Ibis's technology will continue.
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