Chip Equipment Stocks Rise from Depressed Levels
NEW YORK (Reuters) - Stocks of semiconductor equipment makers rallied on Friday from severely depressed levels, as investors perked up to a growth forecast by PC maker Dell Computer Corp. (NasdaqNM:DELL - News)
Shares of Applied Materials Inc. (NasdaqNM:AMAT - News), the world's largest maker of semiconductor equipment, rose 92 cents, or 6.6 percent, to $14.78 -- still far from highs reached just a few months ago.
In April, when hopes were higher for a rebound in electronics sales, Applied Materials' stock approached $28.
"Our view is the stocks aren't expensive," said Banc of America Securities chip equipment analyst Mark FitzGerald.
The stocks appear to have been helped by Dell, which reported a half-billion-dollar quarterly profit on Thursday and forecast more growth in the current quarter.
"We are already seeing some signs of recovery in certain parts of the market," Chief Executive and founder Michael Dell said.
Shares of Texas Instruments Inc. (NYSE:TXN - News), a leader in supplying chips used in mobile phones, said in a regulatory filing on Friday that it was sticking to its plan for $800 million in capital expenditures this year, a positive sign for the chip equipment makers.
Capital spending by chip makers is the lifeblood of the equipment makers. Two of Taiwan's top chip makers, Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan:2330.TW - News). and United Microelectronics Corp. (Taiwan:2303.TW - News), slashed capital spending budgets last month. The move fed fears that chip makers were not expecting to increase sales any time soon.
As a result, chip equipment stocks had declined precipitously. Even as it rose on Friday, the Philadelphia Stock Exchange chip index was down about 45 percent from April highs. |
