IC-equipment market to slow in 2H
Mark LaPedus
EE Times
(01/20/2006 6:39 PM EST)
SAN JOSE, Calif. — While the semiconductor-equipment market looks promising in the near term, orders are expected to slow in the second half of 2006, warned an analyst.
“While the near-term front-end order environment remains strong (December and March both likely up 25 percent quarter-over-quarter), our sensitivity analysis indicates that even if equipment spending were to be up 10 percent year-over-year, industry bookings in general will likely decline in the second half of 2006,” said Avinash Kant, an analyst with Canaccord Adams Inc., an investment banking firm.
“Given we are almost 6-8 months ahead of an imminent slowdown in orders, we recommend that clients start to take some profit in equipment names in general,” Kant said in a new report.
At present, though, the market is stronger than expected. “North American front-end orders were up a strong 25 percent quarter-over-quarter,” he said.
North American book-to-bill data for December increased to 0.96, compared to November’s revised number of 0.93. Front-end book-to-bill came in at 0.97 in December, up from 0.93 in November. Back-end increased to 0.95, from a revised 0.93 in November.
This week, plasma-etch specialist Lam Research Corp. reported a “blow-out” quarter, as its sales were up 24 percent and well above its 5-to-10 percent guidance, said Bill Ong, an analyst with American Technology Research Inc.
“Strong order growth is expected to continue as Lam expects March quarter orders to be up 25-to-30 percent sequentially,” Ong said. “Revenue is expected to increase 14-to-20 percent sequentially ($410-to-$430 million) with shipments up 30 percent sequentially to $510 million.”
Robert Maire, an analyst with Needham & Co. LLC, said ASML Holding NV’s results this week met Wall Street’s expectations. Citing a strong bookings environment and growing average selling prices (ASPs), ASML’s sales are expected to be up for the first quarter of 2006, compared to the fourth quarter of 2005, he said.
On the backend, ATE specialist Teradyne Inc. reported strong Q4 results that were above Wall Street’s expectations, said Dennis Wassung, an analyst with Canaccord Adams Inc.
“We expect that growth in Teradyne's semiconductor test business continues to strengthen, partly from Teradyne's exposure to Sony's Cell microprocessor ramp for the upcoming PlayStation 3 game system,” he said.
“We believe [Teradyne’s] results and data support our thesis for an improving spending environment for semi test equipment,” he said. “Coupled with high capacity utilization rates and IC unit growth, we continue to expect semi test industry fundamentals to remain strong in 2006.”
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