SAN FRANCISCO, Nov 18, 2002 /PRNewswire via COMTEX/ -- ThinkEquity Partners today initiated coverage of nine stocks in the semiconductor capital equipment segment. The following are key highlights included in the Research Note:
-- "Given the continuing downdraft in utilization rates at chipmakers and
our anticipation for seasonality, many investors are significantly
under-weighted in the capital equipment segment, which is unwarranted,
in our view. While we expect the downward trend in bookings to continue
for another 2 - 3 quarters, we believe most stocks have priced this in
and that the risk to reward profiles are favorable, with valuations
close to trough levels. Accordingly, we are initiating coverage on
Applied Materials (Nasdaq: AMAT), Credence Systems (Nasdaq: CMOS),
KLA Technology (Nasdaq: KLAC), Novellus Systems (Nasdaq: NVLS) and
Varian Semiconductor (Nasdaq: VSEA) with an Equal weight rating. We
believe Overweight rated Cabot Microelectronics (Nasdaq: CCMP) and
Rudolph Technologies (Nasdaq: RTEC) are attractive given their
significant exposure to the rapidly growing sub-0.13 micron segment. As
a key supplier to flat panel makers, one of the few segments with
improving near term fundamentals, Applied Films (Nasdaq: AFCO) merits
an Overweight rating, in our view.
-- "Our near term outlook is cautious, driven by our expectation that the
foundries, which typically account for 20% - 30% of equipment
industry's revenues, are likely to slash their 2003 capital budgets for
2003 by 35% - 40%. Nevertheless, if the foundries continue to see a
revenue ramp in 2003, we believe their capital budgets for 2004 are
likely to be significantly higher than in 2003.
-- We expect spending on advanced processes (such as sub-0.13 micron and
copper) to continue unabated even in the near term. Although virtually
all companies under our coverage participate in technology trends, some
such as RTEC and CCMP have a much higher degree of exposure. |
