Calls of Note Part 3

- Friedman, Billings, Ramsey has some positive things to say about Formfactor (NASDAQ:FORM) as their recent checks in Taiwan suggest that FORM is at least a year ahead of competition, and thus not seeing any pricing pressure. Not only has Phicom (CY05 revenues of ~$50M) lost a significant market share at Hynix, some of which won by FORM, they believe that it has recently lost a significant market share at Elpida, helping FORM to further solidify its market share there. Elpida is currently FORM's #1 customer, accounting for 20%-25% of overall revenues. However, the firm believes that Micronics Japan Co. (MJC), a Japanese competitor with CY05 revenues of ~$40M, has recently been able to gain some traction at PowerChip (~15%-20% customer at FORM) for DDR2, though they believe that MJC's advance probe card is frequency limited, a factor that actually limited its penetration into Samsung (for DDR2) earlier this year.

Firm remains comfortable with their current estimates, though do not rule out upside, and encourage investors to accumulate on any pull back as FORM remains one of the best differentiated mid cap names in coverage universe.

Notablecalls: Not actionable but good to know category.