Semiconductor equipment maker Cymer (NASDAQ:CYMI) is an unusual sort of company. Focused on the production of light sources for lithography machines, Cymer is the sort of business that you would think would have been bought out by a larger player years ago.

At least for today, though, shareholders are likely quite pleased that Cymer is still independent. While revenue and income weren't strong in terms of year-over-year growth, the company handily beat the mean analyst estimates, and the stock was bid up aggressively in trading on Wednesday.

Revenue rose 2% on an annual basis and 14%, sequentially, as the company shipped more systems in the quarter. Operating margins, though, were considerably weaker and the company posted a nearly 44% drop in operating income from last year. Due in part to a gain from debt extinguishment, Cymer managed to post year-on-year net income growth of 8% and nearly 11% EPS growth.

Given that Cymer generates about two-thirds of its revenue from lithography companies like ASM Lithography (NASDAQ:ASML), Canon (NYSE:CAJ), and Nikon, Cymer's fate is largely that of its primary customers. As many other semiconductor equipment makers have announced, the market outlook is presently quite murky. While many people are looking for improvements in the back half of the year, the orders haven't yet materialized.

For the quarter, Cymer believes that fab (wafer fabrication facility) utilization rates were somewhere in the 80% area. In order for the company to see real growth, though, management believes that utilization needs to be above 90%. As such, Cymer needs to see improvement in the semiconductor food chain; companies need to produce more chips and buy more equipment with which to make those chips. I know that seems a bit obvious, but some investors seem to forget that many of the companies' fortunes are interlinked.

For patient investors the future could be rewarding. Cymer is a technology leader and believes that it controls more than 80% of its relevant market. Sooner or later capital spending will pick up. Cymer should reap better growth and profitability when that happens.

Cymer has also formed a joint venture with Carl Zeiss to develop production equipment for the flat-panel display market. Given the companies' relative expertise in lasers and optics, this could bear fruit in the future, though it will take time. With companies like AU Optronics (NYSE:AUO) and L.G. Philips (NYSE:LPL) locked in battle for market share and profitability, the opportunity to purchase machinery that allows them to make better displays more cheaply should be lucrative once it's up and running.

In the meantime, purchasing Cymer is something of an exercise of faith. Valuations don't look very good because the state of the business isn't very good. Nevertheless, I believe this company is well-positioned for an eventual semiconductor equipment recovery and aggressive investors might want to start their due diligence now before it's obvious that a recovery is under way.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).