Semiconductor Capital Equipment Stocks Discussion

Top 181. Sep 23, 1999 4:48 AM

» Bill_Tippett - Kirk "Full Story" link is broken! (back to same page)

-- posted by Bill_Tippett

Top 182. Sep 23, 1999 10:33 AM

» KirkL - www.semibiznews.com

Good Link to bookmark
http://www.semibiznews.com/

try This link for semi book to bill.

-- posted by KirkL

Top 183. Sep 24, 1999 7:56 AM

» RandeS - Here's the book-to-bill analysis from dismal.

Here's the book-to-bill analysis from dismal.com:

Semi Book-to-Bill Ratio
Released: 09/23/99
Actual: 1.08
Next Release: 10/21/99
Analysis by: Wes Basel

Summary
Two month drop in equipment orders indicates an easing in semiconductor capacity expansion. Higher cost of capital is constraining capacity expansion in the current semiconductor cycle. Advances in manufacturing technology are driving some equipment demand. Nearly all major chip producers will be re-tooling for larger wafer sizes, finer densities, and copper interconnects over the next several years.

Analysis
Bookings for semiconductor equipment fell in August for the second consecutive month. Shipments also eased slightly, for the first time since the trough of the current cycle in November 1998. So on balance, the book-to-bill ratio was not significantly changed, according to Semiconductor Equipment and Materials International. New orders remain more than 15% below the November 1997 peak. Capacity utilization among U.S. chipmakers remains low and the cost of capital is rising. The two-month slowdown in demand growth for new semiconductor equipment leads to the possibility of more cautious capacity expansion among semiconductor manufacturers. Semiconductor prices, as a result, have been steady to upward for nearly two months, boosted further by possible production shortages following the Taipei earthquake. This improvement in pricing will spur stronger equipment demand if financing costs don’t rise further. Advances in manufacturing technology are another positive for equipment demand. U.S. manufacturers of memory and microprocessor chips, such as Intel and Motorola, are already re-tooling and Asian manufacturers are expected to start soon. There are three primary manufacturing technologies in various stages of development: larger wafer sizes, finer circuit densities and replacing aluminum interconnect wiring with copper. All will become industry standards over the next five years, with copper wiring probably instituted the quickest. Each technology reduces cost relative to chip performance by twenty to thirty percent and thus in total represent a reduction in prices of more than two-thirds.

The SEMI book-to-bill is the ratio of the three-month moving average of new orders for semiconductor manufacturing equipment placed at North American manufacturers divided by the three-month moving average of shipments from the same firms.

-- posted by RandeS

Top 184. Sep 29, 1999 9:33 AM

» KirkL - Bret Hodess give "Thumbs up"

Semiconductor and Semiconductor Equipment Market Rebound

Are in The Early Stages According to Semiconductor Capital Equipment Analyst At Banc of America Securities

SAN FRANCISCO, Sept. 29 /PRNewswire/ -- The demand for new technology and the need for greater capacity are driving the rebound of the semiconductor market, according to Brett Hodess, senior research analyst who follows the industry for Banc of America Securities.

``We predicted a turnaround in the semiconductor equipment market a year ago at this conference, and it's happening,' said Hodess. ``All the ingredients for the semiconductor equipment growth cycle are falling into place.'

Hodess' comments came at the 29th Annual Banc of America Securities' Investment Conference, which runs from September 27 through October 1 at the Ritz-Carlton Hotel in San Francisco. This former Montgomery Securities' conference bears a new name but boasts a program that lives up to its impressive reputation. The five-day conference features 250 presentations from companies that are driving the Business Services, Consumer & Retail, Energy, Entertainment, Media & Telecom, Financial Services, Health Care, Industrial Growth, Real Estate & Lodging and Technology industries.

Hodess asserts that the semiconductor industry is poised for growth as a result of the demand created by ``free' PCs and cheap bandwidth and the need for new technology that drives the performance, lower power and lower cost necessary to deliver these computing and communications improvements. Hodess predicts that new fab activity should drive spending growth of over 20% in 2000 and 40% in 2001.

New PCs, from high-end to low-end, depend upon leading edge semiconductors with 88 percent of PC semiconductor content requiring advanced processes, says Hodess. It's not just the microprocessor, which represent 57% of the cost of ICs in a PC that requires advanced capacity anymore.

Cheaper bandwidth also relies on semiconductor process technology advancements, and communications-specific integrated circuits (ICs), so-called ``Systems on a Chip' (SOC), notes Hodess. The companies that sell these application-specific chips are greatly concerned with time to market in order to succeed. As a result, they rely on leading edge processes to help achieve performance and cost goals more quickly. Moreover, with 95 percent of intellectual property in communications hardware contained on two to three ICs, the ability to test complex chips is in great demand.

Hodess reports that wafer fabrication utilization rates have increased for the third quarter in a row to reach 91%. Demand has been greatest in leading edge technologies with sub 0.3 micron utilization at 95%. Most leading edge capacity has come from fab upgrades. However, as capacity tightens and technology changes abound, the industry is on a verge of building new fabs again, says Hodess. In fact, today's semiconductor fab investment outlook resembles the outlook at the start of the cycle of early 1993.

Hodess believes investors should focus on companies involved in new materials, productivity enhancement, and system-on-a chip solutions, in addition to market share leaders that can leverage their position into meaningful new markets. Along these lines, Hodess' stock picks are large cap companies Novellus Systems, Inc.*, and Teradyne, Inc.*, and small cap concerns, Electro Scientific Industries, Inc.*, Asyst Technologies, Inc.*, and MKS Instruments, Inc.*

Banc of America Securities LLC (BAS), a subsidiary of Bank of America Corporation, is a full-service investment bank and brokerage firm. With principal offices in San Francisco, New York City and Charlotte, BAS employs more than 4,000 associates in offices around the country, and with affiliates, offers capabilities worldwide.

Bank of America Corporation, with $614 billion in total assets, is the holding company for one of the largest banks in the U.S., with operations in 21 states and the District of Columbia.

Banc of America Securities LLC currently maintains a market in NVLS, ESIO, ASYT, MKSI. Banc of America Securities LLC was manager of a public offering for MKSI in the last three years. Banc of America Securities LLC has performed investment banking or other services for ASYT in the last three years. In the ordinary course of business, BAS has obtained a substantial position in MKSI.

-- posted by KirkL

Top 185. Sep 30, 1999 10:35 AM

» Roger_Babson - Short AMAT...

Okay, ladies and gentlemen, it may not be the precise top, the best point at which to short AMAT, but I expect the stock to plummet (crash, if you will), if not very soon, then certainly with the release of Intel's earnings on October 12th and into early 2000, before a Q1 rally. After that, another plunge into next summer.

Targets? $49-$59 for the first leg down and $28-$34 by next summer. $12-$16 by summer-fall 2001.

I expect that AMAT will announce a stock split the week of Ocotber 11th, as well, which will not help the stock price.

Nuclear winter in the PC and semiconductor equipment industries is approaching, regardless of what say the "paid-to-be-bullish" hucksters at the many conferences of recent weeks and months.

Again, it is a falsehood that the semi and equip industries are in the midst of a new up-cycle. False. Untrue. Wrong. Period. The current cycle is about to rapidly decelerate to a bottom sometime in mid- to late-2001 or so. After that, count me a short-term bull for the techies. Yes, "bull". For those of you not sitting down when you read that, I apologize for not warning you in advance and any injuries you may have suffered from fainting dead away.

Get your AMAT shorts while they're still hot. If the stock rallies in the 7-8 trading days, load up with more shorts.

Regards,

-- posted by Roger_Babson

Top 186. Sep 30, 1999 10:59 AM

» KirkL - Shortages Real of Fake?

Thanks for the tip Roger. How is your AOL short at $90 doing these days or that one on Intel?

So you do not think the shortage is for real?
That there will NOT be 20% growth in equipment orders followed by 40% the next yr?

That present 200cm wafers will meet future demand and that the migration to copper interconnect is not going to happen?

That the growth of free PCs, cell phones, collision avoidance radar and GPS for electronics in autos and the rest of things we use, will just stop at present levels of integration?

Are you counting on all capacity now is really tripple orders to build inventory for Y2K?

Please explain the fundamentals behind your views.
AMAT is OFTEN overpriced, but is the cycle really over or just starting AND WHY!? That is the question!

-- posted by KirkL