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(Der folgende Artikel ist zwar mehr auf Cognex gemünzt, gibt aber auch allgemein Orientierung :)
Cognex sees improving chip industry
CEO predicts smaller losses, targets Q2 acquisitions
By Bill Clifford, CBS.MarketWatch.com
Last Update: 6:39 PM ET March 13, 2002
TOKYO (CBS.MW) -- Cognex Corp. of the U.S., the top maker of
machine vision systems for semiconductor fabrication and other industries,
sees a better 2002 than it did just six weeks ago.
While Cognex's candid chief executive, Robert Shillman, does not envision an
easy pot of gold beyond some rainbow -- these days his once reliably
profitable company is losing money -- the nightmare that arose from relying
on the chip and electronics sectors for 60 percent of revenue and on
Japanese customers for 40 percent of all sales appears to be fading.
Lately, the global
semiconductor industry has
been flashing signs of
bottoming out after its
worst slump (see related
story). And some
economists are predicting
Japan's recession will ease
as early as the second
"The worst is over for us,"
Shillman said in an
exclusive interview with
Tokyo this week.
Asked if Cognex (CGNX:
news, chart, profile) was
ready to guide investors
about an upturn in its
business, Shillman said,
"My CFO would tell me
not to answer that question
directly, but I'll tell you this:
Our projections are more
positive than they were.
"That doesn't mean we're
going to be profitable from
here on," he said, "but it
certainly means our losses
will be less than what we
On Jan. 28, Cognex officially snapped a streak of 58 straight quarters of
profit by reporting an Oct.-Dec. net loss of $11.1 million. It warned then that
if low orders were to persist, it would also lose $0.05 to $0.08 per share in
the first quarter and stay in the red the rest of this year.
Keep an eye on it
Two other developments could further improve the outlook at the Natick,
Mass. maker of computers that "see."
In the next few days, Cognex will announce it is ready to bring to market a
more powerful version of its In-Sight product line of vision sensors. These are
low-cost, high-performance miniature inspection devices. Paper and plastic
packaging companies and pharmaceutical manufacturers are among those
using the sensors to automatically measure and identify parts, verify the
correct assembly of products, detect defects and guide production
Shillman also said Cognex expects to make two acquisitions in the second
quarter. The company has $292 million in cash and no debt on its balance
"We are looking at one in Europe, which would be the division of a large
company, and one company in North America," he said, declining to name
names but adding that initial agreements have been signed.
Cognex sells mainly to "original equipment manufacturers," or OEMs. Its
vision systems are key components of the complex machines that
semiconductor equipment makers build. Applications of Cognex devices
include aligning wafers and guiding the placement of tiny electronic devices
onto printed circuit boards.
The semiconductor equipment companies in turn sell to chipmakers, which
produce the bits of silicon that power computers, cell phones and medical
devices. Companies throughout the entire supply chain have been slashing
excess inventories and capital spending ever since the tech bubble burst two
"Cognex is several steps removed, so the recovery will take longer," said
Alexander Paris, analyst at Barrington Research Associates, who lowered his
recommendation on the stock to "hold" on Jan. 29 after the company
reported the fourth-quarter loss.
Shares of Cognex dipped 10 cents to $25.88 but
mostly recovered to $25.95 in after-hours trading
Wednesday. Hardware stocks reeled after
analysts cut revenue and profit analysts for Intel
(INTC: news, chart, profile) and Advanced Micro
Devices (AMD: news, chart, profile). The
Philadelphia Semiconductor Index ($SOX: news,
chart, profile) has now given up more than 8
percent from its intraday high on Friday, which was its highest level since
Cognex shares have traded between $17.60 and $35.57 over the last 52
weeks. "It's a great trading stock for now," Paris said. "The stock could
double or even triple over two years."
In Japan, Cognex controls approximately four-fifths of the machine vision
market, according to Akiharu Inose, director of marketing at the wholly
owned subsidiary. It has about 150 OEM customers, such as Fuji Machine
Manufacturing, Tokyo Electron and Nikon.
"The business in Japan has fallen dramatically, and it's not because we've lost
to competitors. It's because our customers just bought less," said Shillman.
He and Inose said that sales in Japan, which had accounted for 42 percent of
Cognex's entire revenue on average over the past 10 years, dropped to about
20 percent of last year's revenue or less.
Cognex sold $140.7 million worth of vision gear worldwide in 2001, down
43.8 percent from $250.7 a year earlier. See the results.
A turnaround for customers may be in the offing, although it doesn't look like
a "V-shaped" recovery. Nikon Chairman and CEO Shoichiro Yoshida said in
an interview Tuesday, "We've managed to reduce inventory considerably."
On a few occasions, Nikon (NINOY: news, chart, profile) has revised down
its fiscal 2001 sales forecasts for steppers, large machines used to fabricate
semiconductors. It expects a net loss of 11 billion ($85 million) in the year to
March 31, instead of a profit of nearly the same amount, originally forecast
"We are still in a tough situation," Yoshida said, "but the number of orders for
steppers is gradually increasing." Yoshida and Shillman gave lectures on
entrepreneurship at Waseda University, which just dedicated a new academic
building to the Cognex CEO, a recent benefactor.
Despite the hit to Cognex's Japanese business, its subsidiary here was largely
spared Cognex's first job cuts in 15 years. In fact, Japanese staffing grew in
2001 because of the integration of employees from the machine vision
division the company acquired from Komatsu, a Japanese manufacturer of
heavy machinery for the construction industry, the year before.
Last October, Cognex fired 85 staff, including 25 contractors and 60 full-time
"Cognoids," half of whom worked at the Natick headquarters (see the news
release). Shillman said he resisted deeper cuts even though he could have
done so to break even and extend the earnings streak to 59 quarters without
"That would have been damaging to the company," Shillman said. "Losing
money -- my investors don't like to hear this -- it's okay once in a while. You
can't sit at a poker table for 15 years and make money on every hand. Now,
I say it's okay only because what's happening has nothing to do with Cognex.
I wouldn't say it was okay if we screwed up."
Paris, the Barrington analyst, said
Cognex "will emerge from this
downturn stronger than ever," noting
its strong cash position and lack of
"Cognex is hands and feet down the
industry leader. It's gaining market
share," he said.
What has sustained the company through one of the harshest periods since
Shillman founded the enterprise in 1981 is its other group of customers, the
Automotive companies use machine vision systems to gauge dimensions on
brake pads. Beverage makers use them to inspect logo quality or label
positioning. U.S. currency is printed on paper examined by Cognex surface
Check it out
Cognex is moving toward low-cost, user-friendly vision products that don't
require a lot of engineering support on factory floors.
In Tokyo on Friday, it will unveil In-Sight 4000, a sensor device that is five
times more powerful than the image-processing capability of current In-Sight
products. At one-sixth the size, it can be built into assembly robots and small
"Any factory in the world that makes things in a semiautomatic or automatic
way can have it mounted above an assembly line or conveyer. Plug it into an
ethernet, and from any computer in the world, the manager of that plant can
control the manufacturing of whatever items," Shillman said.
In-Sight 4000 goes on sale in Japan next month, and details about when its
U.S. market debut will be announced Monday.
"It has all the power of the products that we've sold in the past for $20,000
and I think it's going to be sold at something like $6,000," Shillman said.
Among the competitors Cognex faces in the small machine vision segment is
DVT Corp., a privately held maker based in Atlanta, Ga., which introduced
SmartImage sensors to the U.S. market 10 years ago.
Bill Clifford is Asia bureau chief of CBS.MarketWatch.com.7