Mark Fitzerald (B of A) 06 Feb 2001
Chip equipment shakeout likely as slump hits bottom in Q2, says analyst
By Mark LaPedus, Semiconductor Business News
Feb 5, 2001 (5:17 PM)
siliconstrategies.com
SAN FRANCISCO -- The current downturn in the semiconductor equipment market could last at least until the middle of 2002, prompting yet another shakeout in this troubled industry segment over the next year, said an analyst at the Banc of America Securities technology conference here today.
In fact, the total capital expenditures by integrated circuit manufacturers are projected to drop 10-to-15% in 2001 from spending levels in 2000, warned Mark Fitzgerald, who tracks semiconductor equipment markets at Banc of America Securities in San Francisco. In total, worldwide semiconductor capital expenditures fall to the mid-$40 billion range in 2001, Fitzgerald said in his presentation at the conference.
"We're in a classic downturn," Fitzgerald said. "My sense is that we will see an inflection point sometime in the next three to four months."
In other words, the semiconductor equipment market is expected to get worse--not better--in several months. Fitzgerald's "inflection point" is when the business hits bottom--which could be in the second quarter, according to the semiconductor equipment analyst.
"The second quarter [of 2001] will be the low point," he explained after his presentation in an interview with SBN. "It will take two quarters after that to sort things out."
As a result, the chip equipment industry will not begin to recover until mid-2001. "We will not achieve [any positive] fundamentals until the first half of 2002," he cautioned.
Given the slowdown in the chip industry--coupled by the shrinking of capital expenditures in the coming year--the semiconductor equipment segment is now ripe for "consolidation," Fitzgerald said.
"There are all shorts of rumors that companies are talking to each other," he added. |
