MrG, Goldman Sachs weighs in on the semi equipment business for first quarter of 2003.
Best regards,
Jeff
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GS US SEMI EQUIPMENT WEEKLY December 23, 2002
Summary: (1) History seems to be repeating itself but everyone remains skeptical, (2) Early signs of a modest pick-up driven not by increasing end-demand but by technology transitions, (3) We now expect industry- wide orders to increase sequentially in Q1 and Q2 2003 barring a dramatic downtick in DRAM pricing or a big down move in the U.S. economy, and (4) News, Events and Price Performance. History seems to be repeating itself but everyone remains skeptical. The news is a bit better in semi equipment land these days with a number of customers currently increasing or planning to increase orders to the equipment suppliers. We don't want to get too far ahead of ourselves as the increases are surely modest at this point but we are amazed that Wall Street simply refuses to believe that business is even mildly improving for the equipment suppliers......
The key takeaway from our trip to Asia last week is that we now believe orders will be up sequentially in Q1 and Q2 2003 for the equipment suppliers. Historically, even moderate order pickups have driven meaningful stock rallies and we expect that history will repeat itself given the large number of skeptics. In Q1, we expect order improvement to be driven by IBM (300mm at East Fishkill), Intel (300mm at Fab 24), Micron (0.13 micron transition), Japan (budget flush due to March fiscal year-end and some DRAM spending) and possibly Hynix (0.15 micron transition). In Q2, we expect follow through from Samsung (Phase 2 orders for 300mm line 12), TSMC (300mm orders for lines 12 and 14) and Nanya/Infineon (300mm orders for new joint venture DRAM fab).... |
