Hi Brian,
That's a really nice trend change.These guys have been ultraconservative about making positive forward looking comments.To say " the downturn is going away", is also saying the recovery is beginning.Last downturn - that was all it took.
This now confirms the frontend will join the backend.The backend doesn't have a yield expanding new technology so their order volume kicks up more relative to the front end.
What's key here is the "glug glug glug" of the pump priming, can be heard.Now that more players are utilizing .13 micron line widths,copper interconnects, and 300 mm - the industry must also convert to keep up or be lost in the go away zone of no margins(without leading edge technology yields).Those who implement first - depreciate the equipment away first, and enjoy ongoing margins the longest.
This definately marks the turn.Now Morgan's famous quote " when the industry decides to change they all change at once",will continue to kickin progressively.
I think we've already seen valuations anticipate the turn. Not to say we won't have dips,but earnings will justify the rich anticipation as we go out the next few quarters.
I think the pops seen in TER,KLIC and COHU(playing its usual laggard's role) just recently - help define who the few additional players will be besides the Gorillas:Amat,Klac,Nvls.(Nicest run has been LTXX - their "Fusion" must be owning the sector)
siliconinvestor.com
Bob
Think we can breath easier.I'm thinking the feared retest of September's lows won't occur in this sector.I do see it occurring in telecom and fiber optic component makers.These guys are now getting a double bottom(first being sept 01).This is very much like what semi's went thru in April,01(second bottom) and Sept of 01(triple bottom) - as the first bottom occurred in Oct of 2000.
Semi's are technically stronger with longer consolidations.I don't think a whole lot will get going until Intc gets over its funk.This is beginning to wet my appetite in the mid 20's(25-26??). |
