STOCKREPORTS

Integrated Process Equipment Corp.

NASDAQ Symbol IPEC

Recent Price 24.25 52 Wk Range 26.88 - 10.25

Yield Nil 12-Mo. P/E NM

Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) NA Fair Value NA Risk HIGH Earn/Div Rank NR
Technical Evaluation: BEARISH since 04/97 Rel. Strength Rank (1 Lowest - 99 Highest) 97 Insider Activity NA

Business Profile 01-MAY-97

Following the disposal of its IPEC Clean division in the second quarter of FY 97 (Jun.), this company now operates through its IPEC Planar and IPEC Precision divisions. Losses in FY 96 and the first nine months of FY 97 primarily reflected costs associated with purchased R&D in FY 96 and the disposal of IPEC Clean in FY 97. In April 1997, IPEC canceled a proposed public offering because of the depressed stock price. Management believes it is seeing a resumption of the growth the company was experiencing in the chemical-mechanical planarization segment of the semiconductor capital equipment industry prior to the pushouts that began at the end of FY 96.

Operation Review 01-MAY-97

Revenues from continuing operations in the first nine months of FY 97 (Jun.) fell 4.4%, year to year. Gross margins narrowed, and R&D spending increased 61%, but in the absence of $37.0 million of purchased R&D expense, partly offset by a $17.6 million program discontinuance charge, the operating loss narrowed to $13.7 million from $20.9 million. After non-operating items and tax benefits, the loss from continuing operations declined to $9,556,000 ($0.65 a share) from $12,147,000 ($0.88). Results exclude losses from discontinued operations and on the disposal of IPEC Clean of $28.6 million ($1.88) and $591,000 ($0.04) in the respective periods.

Stock Performance 27-JUN-97n

In the past 30 trading days, IPEC's shares have increased 44%, compared to a 7% rise in the S&P 500. Average trading volume for the past five days was 895,440 shares, compared with the 40-day moving average of 499,644 shares.

Key Stock Statistics

Fiscal Year Ending Jun. 30

Dividend Data: No cash dividends have been paid. A shareholder rights plan was adopted in March 1997.

Business Summary 01-MAY-97

Integrated Process Equipment Corp., through its IPEC/Planar unit, is the leading supplier of chemical mechanical planarization (CMP) systems. These produce uniformly flat wafers that enable semiconductor manufacturers to improve yields when making advanced semiconductors designed with multiple metal layers and geometries below 0.5 microns. Its CMP systems are used for volume manufacturing of advanced microprocessors, such as Intel's Pentium, Digital Equipment's Alpha and the IBM/Motorola Power PC, as well as advanced memory products.

CMP polishes a wafer with a moving pad containing an abrasive chemical slurry. CMP equipment precisely regulates not only the pad's position, motion and pressure, but also the chemical composition and size of particles in the slurry. Such equipment also increases the precision of photolithography and reduces defects caused by metal residues.

In January 1996, IPEC acquired the Precision Materials operations from a subsidiary of Hughes Aircraft Corp. Re-named IPEC Precision, this division provides the capability for adaptive planarization.

The company currently manufactures two families of wafer planarization systems: the Avanti 372M, which is a fully automated, single-side wafer planarization system for polishing oxide and metal layers on silicon wafers from four to eight inches in diameter; and the Avanti 472, which offers higher throughput and improved ergonomics over the 372M, as well as an improved pad conditioner system. Avantgaard 676, introduced in April 1996, is capable of processing 40 wafers per hour and offers the industry's smallest footprint. The Avantgaard 776, which is in development, is a dry wafer-out, clustered system with a cleaner and IPEC Precision's Integrated Process Monitor System for incline film thickness and uniformity monitoring.

Through its IPEC/Clean unit, the company had also offered proprietary equipment that removes residual particles and ionic contaminants from wafers after the CMP process. IPEC/Clean was disposed of in late 1996.

Products are sold to leading semiconductor manufacturers located throughout the U.S., Asia and Europe. In FY 96, Intel accounted for 29% of revenues. Sales outside the U.S. represented 34% of FY 96 revenues.

Important Developments

Mar. '97 IPEC received an order for multiple units of its next-generation AvantGaard 776 CMP tool for both metal and oxide. The company also received a repeat order for its AvaantGaard 676 from the same customer. The total value of the orders, which will be recognized in the fourth quarter of FY 97 (Jun.), is over $9 million. Subsequently, IPEC announced additional orders from multiple customers for both its current and next-generation CMPs totaling over $13.5 million.

Capitalization

Long Term Debt: $11,905,000 (3/97).

Curr. Ratio	2.3	4.9	2.2	NA	NA	NA	NA	NA	NA	NA
% LT Debt of Cap.	15.1	12.7	46.3	NA	NA	NA	NA	NA	NA	NA
% Net Inc.of Revs.	NM	0.7	NM	NM	NM	NA	NA	NA	NA	NA
% Ret. on Assets	NM	0.6	NM	NA	NA	NA	NA	NA	NA	NA
% Ret. on Equity	NM	0.3	NM	NA	NA	NA	NA	NA	NA	NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--911 Bern Ct., San Jose, CA 95112. Tel--(408) 436-2179. Fax--(408) 436-2170. Chrmn & CEO--S. R. Chitre. Pres & COO--T. C. McKee. VP & CFO--J. S. Hodgson. Dirs--H. C. Baldauf, S. R. Chitre, W. J. Freschi, D. M. Jackson, K. Levy, M. Splinter. Transfer Agent & Registrar--American Stock Transfer & Trust Co., NYC. Incorporated--in Delaware in 1991. Empl-- 0. S&P Analyst: Adam Penn

This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997