Tuesday, Nov 4, 2003 10:40 PM ET
To: Richard Palm who started this subject
From: KMcKlendin
SANTA CLARA, Calif. -- Based on the chatter and frenetic order activity within its component suppliers, Applied Materials Inc. is finally seeing what could be an upturn on the radar screen, according to analysts in the chip-equipment industry.
The chip-equipment giant has begun placing significant orders within its component supplier base, including from the likes of Advanced Energy, BOC Edwards, Celerity, MKS, and others, according to analysts. Applied is ramping up for what the company expects to be a new and big round of tool shipments as early as the first quarter of 2004, according to analysts.
That's good news for the Santa Clara-based company, which has been hit hard by the downturn in the industry. And in other good news, Applied is expected to report solid results in its fourth fiscal quarter. It will announce the results Nov. 12.
"We believe that Applied Materials is likely to achieve or exceed 15 percent sequential order growth vs. their 10 percent guidance in the October quarter," said Bill Ong, analyst with research firm American Technology Research Corp., in a report released today (November 4, 2003).
"Our recent checks indicate that manufacturing system unit build could increase from the low-200's unit level to the high-200's in the January quarter," Ong said in the report. "Applied could likely provide 15 percent bookings guidance in the January quarter and perhaps offer visibility beyond one quarter."
In the summer, Applied reported sales of $1.09 billion in its third fiscal quarter ended July 27, down one percent from $1.11 billion for the second fiscal quarter of 2003. The net loss for the third fiscal quarter of 2003 was $37 million, or minus $0.02 per share, compared to a loss of $62 million, or minus $0.04 per share, for the second fiscal quarter of 2003.
Looking forward, the company in the summer said that it expected sales revenue in the fourth fiscal quarter would be flat to slightly up although the company hoped that orders would continue to rise by about 10 percent from the fiscal third quarter.
Meanwhile, Vincent Valentine, an analyst with investment banking firm Fechtor, Detwiler & Co., in Boston, believes Applied is ramping up for a new round of orders in the latter part of the first quarter of 2004.
"Since the beginning of this year when Applied guided down 30 percent and stopped its extended supply chain forecasting, the semiconductor industry has felt like aircraft flying without a formation or radar for that matter," Valentine said. "Applied is very much like a wingman, the pilot who positions his aircraft outside and behind (on the wing of) the leader of a flying formation," he said.
"Our sources close to the supply chain have informed us that Applied recently rejoined formation and has issued its supply chain a forecast extending out two quarters. Our contacts broadly indicate that the previous forecasts coming out of Applied had been for about two weeks versus the two-quarter view that they are now providing," he said.
Applied's visibility has improved for the company's CVD platforms. "We are told that strategic parts orders for the Producer platform are up 30 percent for the quarter ending Jan. 31st and another 30 percent for the following quarter," he said. However, Applied's other processing-equipment platforms--Reflection, Mesa, Centura, and Endura--are flat.
The order activity at Applied has prompted Steve O'Rourke, an analyst at U.S. Bancorp Piper Jaffray, to raise his forecast for the company's sales and EPS to $1.253 billion and $0.09, respectively, in its fiscal first quarter of 2004.
"We believe Applied, as well as other OEMs, have seen recent, significant order activity from customers like Samsung, SMIC, Powerchip, Sony, and TI," O'Rourke wrote in a recent report. "We believe that TSMC has largely negotiated packages with the major OEMs, and is poised to place orders in CQ1 after assessing early 2004 demand; it is conceivable that some TSMC orders could come in CQ4," he said.
"Near-term deliveries: we believe that a reasonable portion of these orders could be delivered within the next one to two quarters, generating incremental revenue in the Jan. quarter, and in 1H'04," he said.
siliconstrategies.com
--Keith |
