Purely my opinion:

If you listen to the earnings calls, it's the same handful of investment guys asking the questions, and they almost sound like "friends" of CCMP. They never really ask the hard questions like you hear in some earnings calls from other companies - they never really challenge hard. They just get a nice answer and say, oh, thank you!

My opinion: CCMP is going through the standard commoditization that so many markets inevitably go through. They had a specialty product in a high tech market, they oould demand and get high prices (what you can read is prices today are, in most areas like copper, about 10X less than they were 5 years ago and only getting cheaper,) and high margins. That's how they became nice and cash rich.

Today prices are dropping hard as the entire CMP market is commoditized. You have a lot of suppliers, all competing for the same few big customers. The customers can make any product work if the price is low enough, so they can and have forced CMP slurry suppliers to cut prices hard and it will continue. Again, take any business classes or just live through it and it's the expected specialty -> commodity cycle.

I think the problem for CCMP is that, a big company like Hitachi or Air Products/DuPont etc. is diversified enough that, when the margins drop so hard, they can just enjoy the previous profits and shift their resources to other new high value products and markets and accept the reduced cash flow from the slurry market. But if your entire company is founded on CMP slurries - you've got a problem. The reason you hear more about pads in terms of activity in these CCMP earnings call is they must know that the slurry business is becoming quite down and dirty and will only get worse.

But, again, in my opinion: CCMP is not a pad company. They don't have the plastics/polymers competency in properties, testing, manufacturing, etc. Rohm and Haas, the people they are taking on in pads, does and has for many years. Also, R&H has an active development program, decades of polymer competency and resources and polymer people, etc. so they will alway be ahead of a company like CCMP in new product development, new technology development, etc, in this area. CCMP is STILL trying to get their D-100 pad made consistently, and on the market, according to the earnings calls, and that has been their first gen product since they started in pads years ago. In my opinion, I predict some difficult times for the pad portion, just because of the horsepower of the R&H engine.

For me, I'd like to hear about how CCMP is moving into new markets where their experience in finishing could be exciting. We heard about some hints and teases in that area before, but I don't hear them talking about it any more.

Again, all just my opinion - I think that CCMP is simply a company founded on the premise of a high tech specialty product that is finding that their market has become commoditized. It will be interesting to see how they fare once the business in general starts picking up, but I'd be very surprised if they ever posted the kinds of margin and cash flow they used to. In terms of the stock price, I think they just aren't studied that hard.

FWIW