Semiconductor Capital Equipment Stocks Discussion
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» Kirk - Customer satisfaction ranking
European suppliers of chip equipment gain in satisfaction rankingCheck the lists near the end for highlighted, familiar names.
By J. Robert Lineback
Semiconductor Business News
(07/03/00, 02:31:14 PM EDT)
http://www.semibiznews.com/story/OEG2000...
SAN JOSE -- European-based suppliers of semiconductor equipment have made impressive gains in customer satisfaction during the past year while U.S. vendors continued to slip in the ratings, said an annual survey of chip makers conducted by VLSI Research Inc.
For the third straight year, the worldwide survey showed the number of American suppliers dropping in the five equipment segments of VLSI Research's "10 Best Companies" report, which was recently released by the San Jose research firm. Meanwhile, the number of European-based equipment suppliers grew in the new rankings, reaching 28% of the companies listed in this year's report vs. 23% in 1999.
In fact, all of the newcomers in VLSI Research's 12th annual ranking of customer satisfaction were based in Europe. Oxford Instruments Ltd. of Highwaycombe, England, appeared for the first time in the list at the top position in the small suppliers segment for wafer-processing systems (companies with less than $300 million annual revenues). The U.K.-based supplier of analysts and measurement systems had an overall rating of 8.17 out of a total of 10 points.
European suppliers held 13 of the total 46 positions in the rankings, compared to 11 out of 47 last year. VLSI Research said it mailed out 45,098 questionnaires for this year in six languages--English, Japanese, Korean, Chinese, German, and French. A total of 2,168 were returned and 2,047 were used in the survey.
"Custom satisfaction is an issue that's close to the hearts of European suppliers," said analyst Risto Puhakka, vice president of research operations at VLSI Research, which tracks semiconductor production tool markets. He agreed with the general perception that European vendors often must try harder to win business because most of their major customers are located in other geographic regions around the world.
The number of U.S.-based companies in VLSI Research's 2000 "10 best" rankings dropped to 21, or 46% of the companies listed. In 1999, U.S. companies occupied 24 out of 47 positions in the rankings, or 51%, said VLSI Research. Japanese suppliers remained at the same level in the rankings with 26%, or 12 companies, in the five equipment segments, of the report.
To ranking suppliers, VLSI Research asked managers and "decision makers" at chip companies around the world to rate equipment suppliers in eight categories--tool performance, uptime, software, quality, process support, technical leadership, support after sales, and overall commitment to supporting customers' needs. Equipment vendors are placed into five segments: large suppliers of wafer-processing systems (annual sales over $300 million); small suppliers of wafer-processing tools; test & material handling equipment; process diagnostic systems; and assembly & specialty equipment.
Contrary to the belief that bigger is better, the survey showed small suppliers of wafer processing system had the edge in customer satisfaction over larger competitors. The "10 best: vendors in the small supplier group increase their average rating to 7.83, up 0.47 from 1999. This also was the only group where the average ratings increased in all eight categories, said VLSI Research. This group received highest ratings for quality-of-results and product performance.
Making the "10 best" listing for small suppliers of wafer-processing tools were: Oxford Instruments (8.17); Tegal (8.04); Karl Suss (8.03); SEZ (7.98); Steag Electronics Systems (7.95); CFM Technologies (7.93); Ulvac Japan (7.54); Ultratech Stepper (7.53); Kokusai Electric (7.51); and Plasma-Therm (7.49).
In the group of large suppliers of wafer-processing systems, vendors saw their average rating slip by 0.06 to 7.77. The large suppliers received high marks in the "quality-of-results" category, but software remained an area for the most improvement, according to the survey.
Making the "10 best" list for suppliers of large wafer processing were: Varian Semiconductor (8.66); ASM Lithography (8.27); Dainippon Screen Manufacturing (7.83); Tokyo Electron (7.67); Canon (7.51); Novellus (7.39); Nikon (7.33); Eaton (7.23); Applied Materials (6.99) ; and Silicon Valley Group (6.89).
In the test and materials handling equipment segment, the top 10 suppliers received an overall average rating of 7.75, a decline of 0.16 from last year. Suppliers got their highest marks for quality-of-results, uptime, and product performance categories, but software remained the lowest rated category despite an improvement of 0.05 from last year.
The "10 best" in the test and materials handling segment were: Integrated Measurement Systems (8.84); Karl Suss (8.84); SZ Testsysteme (8.23); Tokyo Electron (8.00); Tokyo Seimitsu (8.00); Electroglas (7.84); Teradyne (7.54); Agilent Technologies (7.43) ; TMT (7.26); and Advantest (7.16).
The average score of process diagnostic equipment suppliers also dipped slightly by 0.05 to 7.23 in this year's survey. VLSI Research said the highest ratings were achieved in uptime, quality-of-results, and product performance categories. Only six companies were listed this year in this group because of insufficient qualifying returns in the survey, said the San Jose research firm.
Topping the ranking for process diagnostic equipment were: Agilent (8.29); Rudolph Technologies (8.07); Hitachi (7.61); Schlumberger Semiconductor Solutions (7.55); KLA-Tencor (6.74); and Therma-Wave (6.54).
European suppliers continued to have a strong presence in the assembly and specialty equipment segment of VLSI Research's survey--six out of the 10 companies are based in Europe in this top listing. The research firm said this group did a "remarkable join in this year's challenging environment, where demand for equipment has expanded rapidly." The highest rankings in this segment were achieved in the quality-of-results, product performance and uptime categories, according to VLSI Research.
Making the "10 best" in the assembly and specialty segment were: Orthodyne Electronics (8.94); Alphasem (8.79); ASM International (8.31); ESEC (8.27); DISCO (7.90); ICOS Vision Systems (7.83); Kulicke & Soffa (7.67); Datacon (7.51); Shinkawa (7.43); and F&K Delvotec Bondtechnik (7.16).
-- posted by Kirk
-- posted by Rande
» Kacos - So Rande, I am assuming that if one has stock in the semiconduct
So Rande, I am assuming that if one has stock in the semiconductor area that you feel we should wait out this little crisis. I know stocks tend to go up and down. Tech stocks are tricky and if your investing in them you should expect a little drop now and then. Personally I think they will bounce back...but I'm a novice in this area.Kacos
-- posted by Kacos
» Rande - I don't own any semi-conductor stocks outright, but have plenty
I don't own any semi-conductor stocks outright, but have plenty in some of the mutual funds I own, no doubt. That said, the debate seems to be over near-term trends and there is much disagreement at that. For those who are looking to get in an out on a short-term basis, it might all mean something. The question for me would be, "Is the use of semi-conductor chips likely to increase or decrease over the long term? Are we in a secular trend of increasing use of and dependence on such technology (from computers to telecommunications to everyday appliances and machines) or not?-- posted by Rande
» Kirk - Kacos
Perhaps this opinion will give some balance.http://www.thestreet.com/comment/taskmas...
Excerpt:
(read down to this part)
Chips on the Table
One reason some market players are growing increasingly wary is the recent performance of chip stocks. If wireless is the sexy lingerie of technology, semiconductors are the girdle -- holding it all together, that is.
The Philadelphia Stock Exchange Semiconductor Index fell 3.6% Thursday, and is now down 11.1% since June 21. Little wonder then, some folks are getting worried about the group's technical position while others fret that a downturn in the chip cycle is at hand.
Here is the other side of that story, culled from a report published earlier this week by Richard Whittington of Banc of America Securities.
"Over the past week, once again, there've been numerous concerns raised over cell-phone demand, chip inventories and capacity increases," Whittington wrote. "Our checks with industry sources suggest these concerns are -- once again -- misplaced. The specific 'talking points' are accurate but the conclusion drawn is wrong."
For those who are unfamiliar with Whittington, or who are quick to dismiss all Wall Street analyst as slaves to underwriting's siren song, Whittington left SoundView in 1996 reportedly because that firm refused to back his negative (and ultimately correct) call on the industry. He is not someone who fears the reaper of negativity.
Whittington returned to the sell side last August, promptly adopted a extremely bullish outlook and hasn't wavered since.
"Our conclusion here is that not only is the cycle alive and well but proving much longer lived than anyone had anticipated, suggesting that capital spending programs are soon to be ratcheted still higher," the analyst contends. "As the summer concludes, we believe investors today scared of their own shadow will gain conviction and embrace these stocks like there's no tomorrow. Will you?"
Whittington is on vacation so I couldn't ask if that means he's expecting near-term weakness. Even if, it doesn't seem to deter his long-term optimism.
Whittington currently has buy recommendations on a host of stocks and strong buys on Analog Devices (ADI:NYSE - news) Advanced Micro Devices (AMD:NYSE - news), Altera (ALTR:Nasdaq - news) Atmel (AMTL:Nasdaq - news) Cypress Semiconductor (CY:NYSE - news) Integrated Device Technology (IDTI:Nasdaq - news) Integrated Silicon Solutions (ISSI:Nasdaq - news) Intel (INTC:Nasdaq - news) International Rectifier (IRF:NYSE - news), Lattice Semiconductor (LSCC:Nasdaq - news) LSI Logic (LSI:NYSE - news) Maxim Integrated Products (MXIM:Nasdaq - news) Micrel (MCRL:Nasdaq - news) Micron Technology (MU:NYSE - news), National Semiconductor (NSM:NYSE - news), PLX Technology (PLXT:Nasdaq - news), Semtech (SMTC:Nasdaq - news), STMicroelectronics (STM:NYSE - news), and Texas Instruments (TXN:NYSE - news).
Bank of America Securities has done underwriting for PLX, International Rectifier, National Semiconductor and Semtech.
-- posted by Kirk
» Kirk - One word of warning.
One word of warning...Picking the right stocks in this sector is KEY!!!
See this chart for a good example between a great investment and money better invested under your mattress since the sector bottomed.
-- posted by Kirk
» Kirk - 3 with 70-90% upside in 12 to 18 months?
I didn't catch his name, but an analyst for the semi industry (Indian guy in SF but not Dan Niles) was just on CNBC and listed 4 stocks he likes for 70 to 90% appreciation in next 12 to 18 months. Of course, I liked him as he said the sector was over correcting as it was already in a good correction. He says semiconductor unit growth was the CORRECT indicator to predict the slowdown in the past two cycles and there is no slowing projected, just a slowing in a very high rate of growth. (2nd derivative). [my comment: Good thing most don't understand derivatives so we get to profit!]I got 3 of the 4 names he liked the most: Credence (CMOS), AMAT, LRCX and one other.
http://finance.yahoo.com/q?s=cmos&d=3m&c...
Sorry I missed the 4th but I figured the LRCX mention was worth a post.
Kirk out
-- posted by Kirk
» Kirk - Jon Joseph of Salomon Smith Barney Report
From: Glen2 Thursday, Jul 6, 2000 3:51 PM ETReply # of 88
Here is page 1 of a 9 page report issued yesterday by Jon Joseph of Salomon Smith Barney that started the semiconductor slide:
Semiconductor Sector:
Trend Reversal in Commodity Components Semiconductor Sector
July 5, 2000
Jonathan Joseph
415-955-4998
jonathan.joseph@ssmb.com
Clark Westmont
415-955-4933
clark.westmont@ssmb.com
Edward Sun
415-951-1830
SUMMARY
➤ Given what we believe are slowly reversing industry fundamentals, we are
downgrading the semiconductor sector from Outperform to Neutral.
➤ Though a slowdown in the group may take 6-9 months, we see “first mover”
evidence of a trend reversal in decelerating industry unit shipments coupled
with price declines and contracting lead times in commodity memories and
passives—segments that were most severely impacted in the shortage.
➤ As a backdrop, the sector is likely to see peak capital spending growth rates
this year, which has closely correlated with cyclical shipment peaks in the past.
➤ We are also reducing our ratings on four stocks, taking Texas Instruments from
1M to 2M, Advanced Micro Devices from 1S to 2S, National Semi from 1H to
2H and Silicon Storage from 1S to 3S.
SUMMARY VALUATION AND RECOMMENDATION DATA
Earnings Per Share
Company (Ticker) Price FYE Rating Target LTGR Current Yr Next Yr
Advanced Micro Devic- $77.25 Dec Curr 2S $100.00 15% $5.50E $5.00E
es Inc (AMD#) Prev 1S $135.00 15% $5.50E $5.00E
National Semiconduct- $56.75 May Curr 2H $80.00 20% $2.90E $3.35E
or (NSM) Prev 1H $120.00 20% $2.90E $3.35E
Silicon Storage Tech- $88.31 Dec Curr 3S $105.00 25% $2.10E $3.50E
nology (SSTI#) Prev 1S $105.00 25% $2.10E $3.50E
Texas Instruments- $68.69 Dec Curr 2M $80.00 20% $1.25E $1.55E
(TXN) Prev 1M $93.00 20% $1.25E $1.55E
WATCH BOTH THE TOP-DOWN AND BOTTOMS-UP INDICATORS
In trying to understand the semiconductor cycle, we look at both top-down indicators,
mostly macroeconomic data like shipment growth rates and capital spending, and we also do
a reality check on bottoms-up indicators, microeconomic inputs like lead times, prices and
inventories. For most of this year, we have become increasingly concerned about the top-down
picture, but have been reassured the upcycle was intact as lead times continued to
extend, prices firmed, and inventories remained low. The bottoms-up picture, however, went
cautionary recently, apparently brought on by a slight slowing in cellular phone growth
expectations and the rapid increase in capacity. We do not believe normal summer slowing is
the culprit.
TOP DOWN STORY HAS BEEN WEAKENING IN THE LAST SEVERAL MONTHS
➤ Capital spending growth should set peak this year. Peak years in capital spending
closely correlate with peak years in semiconductor growth. We believe strongly that
semiconductor cycles are mostly defined by excess capacity rather than by a fall-off in
demand, particularly in economic boom of the 1990s. The only demand-induced
slowdowns in the last 20 years were in 1985 (declining PC market) and 1997 (Asian
financial crisis). missin the rest
-- posted by Kirk
» Kirk - Banc of America Securities – Coverage Initialed
Banc of America Securities – Coverage Initialed Teradyne TER Buy $80
PRI Automation PRIA Buy $72
Novellus Systems NVLS Buy $70
Lam Research LRCX Buy $40
KLA-Tencor KLAC Buy $62
Credence Systems CMOS Buy $63
Brooks Automation BRKS Buy $68
Applied Materials AMAT Buy $103
Asyst Tech ASYT Buy $44
Source: Briefing.com
or
http://www.siliconinvestor.com/stocktalk...
-- posted by Kirk
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