Over the last several days LRCX rallied from $15 to over $21! It is too early to buy most of the names in this sector. In fact, they are good shorts on rallies! Just look at the GMs of companies that were heavy spenders last few years and you will know why these equipment vendors will have to wait a while for good times to return. Weak asian currencies will also make it harder to finance equipment priced in USD!
-Pam
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Semiconductor Market and Equipment Sales Dropping
The market has been on a downward route since October By Ionut Arghire, Hardware Editor
2nd of December 2008, 10:48 GMT
The semiconductor equipment market is expected to drop by almost 28 percent this year to $30.91 billion, announced SEMI. Moreover, the market is also reported to decline about 21 percent in 2009, while experiencing almost 31 percent growth in 2010. The wafer processing equipment is expected to fall by 28 percent in 2008 to $22.95 billion. The market for assembly and packaging equipment is said to move downward by almost 24 percent to $2.16 billion, while the market for equipment to test semiconductors should decline 27 percent to $3.69 billion this year.
“Worldwide semiconductor manufacturing equipment sales have declined to levels last seen in 2003 and we anticipate a second year of double-digit decline in 2009,” said Stanley T Myers, president and CEO of SEMI. “Impaired or nonexistent business trend visibility is pervasive amidst the deteriorating global economy. Therefore our outlook for 2010 is based on patterns of previous industry recoveries.”
In addition, the Japanese market is expected to decline by about 20 percent, but still be able to surpass Taiwan in becoming the leading region for sales of new equipment. South Korea is projected to drop by about 28 percent this year, while sales of new equipment in China would be 35 percent lower. The previsions say that the Rest-of-World market regions should decline by 10 percent.
The previsions are based on the current state of the semiconductor market, which is reported to have seen a 2.4 percent decline in sales during October, down to $22.5 billion compared to $23.0 billion in October 2007, as the Semiconductor Industry Association (SIA) stated. October sales were 2.1 percent lower than those registered in September this year.
Industry sales went up by 3.8 on year, yet down 1.4 percent in October compared to September 2008. DRAMs and NAND flash registered decline in sales year-on-year due to pricing pressure. DRAM sales went down 14 percent, while NAND flash sales were 41 percent lower. At the same time, DRAM 1Gb equivalent units increased by 73 percent and sales of 2Gb equivalent NAND units grew by 123 percent.
An overall look at the first ten months of the year shows sales of $216 billion, 2.6 percent up from the same period of 2007, when sales were of $210 billion.
“The slowdown in worldwide semiconductor sales that became evident in September continued in October,” said SIA president George Scalise. “The worldwide financial turmoil is expected to continue to impact demand for semiconductors as we enter 2009. For 2009 PC unit shipments are forecast to decline by 5% and mobile handset unit shipments are projected to be down by 9%. PCs and handsets account for approximately 60% of total demand for semiconductors.” |
