Shares of chip equipment makers fall on
monthly report
sjmercury.com
SAN FRANCISCO (Reuters) - Shares of Applied Materials Inc., KLA-Tencor Corp.,
Novellus Systems Inc., and other semiconductor equipment makers tumbled on news
of a decline in orders and shipments last month.
The report, from the Semiconductor Equipment and Materials International group, said
the chip equipment industry posted a book-to-bill ratio of 1.07 for the month of
September, down from a revised August figure of 1.09.
A book-to-bill ratio of 1.07 means that $107 in orders were received for each $100
worth of products shipped. Book-to-bill ratios are used by the industry as monthly
indicators of demand.
Analysts pointed out that September is historically one of the slowest months for
capital equipment and in October, order rates should show sequential growth again.
''It's misleading because even though it was down, you need to realize that September
has always been the trough month for the book-to-bill,'' said Min Pang, a Cowen &
Co. analyst.
''If history is anything to go by, then October should be up from September,'' Pang
said.
Investors are also nervous about semiconductor equipment stocks, after recent
third-quarter earnings disappointments by major customers of equipment makers --
semiconductor firms such as Advanced Micro Devices Inc., Intel Corp. and LSI
Logic.
Shares of Applied Materials, the leading semiconductor equipment maker, fell $3.94 to
$45.125 in heavy trading on Nasdaq. KLA-Tencor was down $4 at $62.44, Novellus
Systems was down $2.875 at $58.50, and Lam Research Corp. slid 62.5 cents to
$41.875, all on Nasdaq. Those companies comprise what is called the ''front-end''
segment of the book-to-bill, which is made up of the wafer processing equipment
makers.
Analysts said the book-to-bill ratio is divided up in three segments and the ratio for the
biggest segment, the wafer processing equipment companies that make up the
front-end, was 1.02 for September, down sharply from 1.08 in August. |
