Matt over on the AMAT thread posted an input citing some CSFB comments that are produced below.
<<INTC Intel: Could INTC cut capex? - Credit Suisse (19.35 ) -Update-
Credit Suisse says that in recent weeks there have been several other data points that have now led them to believe that either INTC's $6.9 bln capex could be at risk, or '07 capex could have a downward bias. Firm does not think the possibility of capex or order cuts from INTC are baked into current assumptions for 2H06 for the co's they cover. Firm continues to believe that semi equipment stocks generally have a downward bias given a potential order peak mid-year. While they remain comfortable with their Overweight call on LRCX, they note that LRCX has very limited exposure to INTC; semi equipment co's with relatively higher exposure to INTC include NVLS and VSEA.>>
I think this comment about "potential order peak mid-year" goes a long way in defining the recent downward trends of the semi-equips recently. As an example, today the DOW was up 59, the NASDAQ up 9, the SOX, SMH, AMAT, KLAC, LRCX, and TER were all down for the day.
"order peak mid-year" is a code word for falling BtB, and lower Billings in the later part of this year, and lackluster performance going into 2007. I think many analyst firms have "bought" this story line, and are sticking to it.
Don |
