>> I suppose my question is whether there is likely to be enough market demand in
Europe and North America to warrant increases in Asian capital investment in
semi-equipment. The idea would be that the return on investment and/or the
increase in market share would be sufficiently high to justify the additional
capital outlays. My sense is that the prevailing opinion seems to be that there
won't be -- at least in the short run. But it is hard for me to imagine domestic U.S.
earnings growth of 13% in the 3Q and 18% in 4Q (as some are forecasting)
without some significant demand for semiconductors.<<
As someone else pointed out, the Asians would love to invest, but it's unclear where the money is going to come from. Asian banks have problems of their own, and intelligent Western banks are likely to demand punitive interest rates given the existing debt problems at many of these companies. Moreover, DRAM capacity is still way out of balance with demand, and ASIC/foundry capacity isn't much better. No matter how much you need the technology, it's hard to build new fabs when your existing fabs are bleeding money.
Yes, strong DUV sales will occur, but probably not as quickly as expected.
As for the earnings growth forecast you quoted, I don't see it happening without significant semiconductor demand, either, and therefore see those estimates as perhaps overly optimistic.
Bill McClean, president of IC Insights, discussed all this in a good bit of detail about a month ago:
news.semiconductoronline.com
Since then, the picture has, if anything, gotten worse.
Katherine |
