Semiconductor Equipment . . . American Technology Research believes that Applied Materials is likely to achieve or exceed 15% sequential order growth vs. their 10% guidance in the October Quarter. Firm's recent checks indicate that manufacturing system unit build could increase from the low 200 units level to the high 200 units level in the JanQ. AMAT could likely provide 15% bookings guidance in the JanQ and perhaps offer visibility beyond one quarter. AMAT reports Nov 12.
Applied could introduce a PVD tool for the flat panel display market in the next few months. AMAT could be looking to increase its market presence in FPD (at about $500M run rate this year in CVD) and entering the PVD business could double its addressable market in FPD.
Currently, the leading PVD tool supplier for the FPD industry is Ulvac, followed by Unaxis. The CVD tool opportunity could be 10-12 tools per line for a 100K sheets per month line; the dollar opportunity could be $100 million - $120 million/fab (2 deposition steps: in transistor and isolation stack). PVD provides a similar or higher dollar opportunity per fab (4 deposition steps). Given AMAT's 80%+ market position in PVD for semi mfg, where its PVD tools have high reliability and throughput, low down time and lower cost of ownership, and given the increasing glass sizes, AMAT's traditional PVD tool strengths could position it well in the FPD market. here are tremendous growth opportunities in FPD driven by LCD TV, PC migration to FP screens, notebooks, PDA, handset, and others.
Semiconductors . . . Atmel Sensor selected by Sharp to provide logon security for its newest and first fingerprint-protected Tablet PC, Sharp Mebius Muramasa. The need to type a password or write it openly on the Tablet PC display is replaced by faster logon through a simple finger swipe on Atmel's FingerChip, preventing access to personal information, or critical data or illegal use of the device by a third party.
Wedbush removes Xilinx from Focus List and adds Texas Instruments. XLNX is trading near their $35 target and they believe that a full recovery of the co's communications end mkts (including telco wireline) will not come until 2nd half 2004.
Boxmakers . . . Hewlett-Packard upgraded at JP Morgan to Overweight from Neutral. Although firm continues to believe Hewlett Packard faces long-term challenges in competing against IBM and Dell Computer, they have become less concerned over certain fundamental risks in the story: 1) firm believes the steady improvement in the macro environment will benefit IT spending, and these improvements should counter some of HPQ's competitive pressures, 2) believe the downside risk to printing margins is limited, particularly considering the healthy consumer spending environment, 3) HPQ should benefit from its relative strength in notebooks and the consumer segment, and component pricing could become more favorable for PC OEMs in coming qtrs, and 4) firm expects the stock's discount to peers to narrow.
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