Robbie Stephen noe on sector
Semiconductor Capital Equipment
Sue Billat, Semiconductor Equipment/Foundries
After the close yesterday, Intel announced its 2001 capital expenditure budget of $7.5 billion, up 12% from $6.7 billion in 2000,” said Billat. ”The company indicated that its spending will be driven by investments in 0.13 micron process, which we believe will be dominated by copper, as well as 300mm wafer process technology, which should lead to unit cost reductions of about 30% in 2002 and beyond. In our view, Intel is using its strong balance sheet to move ahead in copper technology and to realize the cost effectiveness of 300mm processing. In our view, Intel’s large budget signals a big push into copper, another key piece of evidence pointing to the acceleration of copper adoption. We believe the top 10 chipmakers, especially those in logic, are fully committed to copper while the second tier players are beginning to move in this arena. Just as Intel announced in December regarding its Leixlip, Ireland fab, we believe Chartered Semiconductor has also pushed out its 200mm fab (Fab 7), converting it to a copper based 300mm fab instead. We believe the primary driver behind 300mm is the potential cost reduction of about 30% per die. In particular, we believe that the boost in spending at Intel is driven by the company’s intention to ramp P4 production in the coming quarters. We note that the P4 chip is nearly 2x the size of the PIII, and that producing P4s on 300mm wafers lowers die loss at the wafer edges.”
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