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  "documentTitle": "Lasertec Corporation (6920)",
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  "authorName": "Scorpion Capital",
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  "presentationDate": "2024-06-05 00:00:00",
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      "text": "In the quarter ended September 30, 2023, Lasertec’s gross margin mysteriously collapsed from 56% to 36% with no explanation.",
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      "text": "“Sitting on top of a lot of inventory”; “holding back orders”; replacing defecting light sources",
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      "text": "gross margin: 36%",
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      "text": "– who stated he is friendly with Lasertec’s CEO and that customers are “holding back the orders, waiting for improvement light source-wise or whatever”; “pretty much what the reality looks like…the reason why they are sitting on top of a lot of inventory.” In the quarter ended September 30, 2023, Lasertec’s gross margin mysteriously collapsed from 56% to 36% with no explanation. Management was evasive when asked by analysts after its earnings release. The executive suspected that Lasertec had to replace defective light sources in some tools, which destroyed their margin: “my suspicion is it was the light source…[which] along costs $10 million…if they are forced to replace the light source two or three times…that will cost them $40 million.”",
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      "text": "Q: “The KLA person I talked to said that Lasertec customers were “begging and crying” for them to hurry up and come up with an actinic product to compete with Lasertec. That's how miserable it sounded like the customers were. Is that consistent with what you've heard?”\nA: “Yes, I think that's pretty much what the reality looks like. That's also the reason why they are sitting on top of a lot of inventory stock.”\nQ: “The customers just don't want to buy it?”\nA: “They're holding back the orders, waiting for improvement light source-wise or whatever.”\nQ: “This last quarter, Lasertec made a very interesting announcement. They were very secretive and vague about it, but their gross margin collapsed this last quarter, and they said we had a few machines that had no margin on them, but now they've cleared and now our margins… it was strange. Do you know what that was about?”\nA: “No. My suspicion is it was about the light source. The light source didn't perform, so the customer demands a new light source. And I heard the light source alone costs $10 million. So, if they are forced to replace the light source two or three times until it functions properly, that will cost them $40 million, almost as much as a new tool, as you mentioned, $40 million being the price. It can be very costly to replace parts. That's my suspicion.” - Longtime, senior semicap equipment executive in Japan who is friendly with Lasertec’s CEO",
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      "text": "My suspicion is it was the light source. The light source didn't perform, so the customer demands a new light source. And I heard the light source alone costs $10 million. So, if they are forced to replace the light source two or three times until it functions properly, that will cost them $40 million, almost as much as a new tool, as you mentioned, $40 million being the price. It can be very costly to replace parts. That's my suspicion. — Longtime, senior semicap equipment executive in Japan who is friendly with Lasertec’s CEO",
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      "text": "Source: Scorpion Capital consultation calls with experts",
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      "text": "Other research sources corroborated the mountain of inventory, such as a senior semiconductor executive in Japan",
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