| | From Street.com
Chip chatter: Whenever I've raised questions about chip-equipment makers over
the past year or two or three the response has been something like, "Hey, stupid,
don't you know their business is going to explode as chipmakers transition to 300
millimeter fabs?" Yet, anybody seen much in the way of 300 millimeter fabs lately?
Not really, and Fechtor Detwiler analyst Fred Ramberg (who has been so good at
making some key calls lately about the chip market) isn't sure you'll see much of
them anytime soon. With chip demand and prices both down, and the economics
of running a 300 millimeter fab not quite as cut-and-dried as chipmakers originally
thought, he argues that the fabs are simply not yet economically feasible to build.
What's more, Ramberg has been hearing (and confirming) tale after tale of
problems associated with the use of copper as the "interconnect" material of
choice to replace aluminum. (Copper, Ramberg explains, is a key feature in
producing premium parts that can command high prices and fatter margins.)
What's an investor to do? Well, a slowdown in the 300 millimeter fab rollout
wouldn't be good news for the chip-equipment crowd, such as Applied Materials
(AMAT:Nasdaq - news - boards), Novellus (NVLS:Nasdaq - news - boards) and
Semitool (SMTL:Nasdaq - news - boards). But the need to fix the copper problem
(and this is especially for those of you who keep writing that I never write anything
positive) could be a boon for companies that can offer solutions to the copper
problem. He's especially watching companies like Therma-Wave (TWAV:Nasdaq
- news - boards) and ATMI (ATMI:Nasdaq - news - boards). |
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