Sounds reasonable to me, Mason. The reasons (as far as I can tell) for the selloff in the semiconductor equipment sector are twofold:
1) A mimic'ing of the selloff in the front-end equipment sector, as semiconductor manufacturers are torn between buying more 200mm (8 inch) equipment or shifting over to 300mm (12 inch) equipment. The end result here is that people are having a tough time deciding what to buy and aren't buying as much as a result.
2) Potential over-ordering by semiconductor manufacturers.
I believe that while #1 is an issue for the front end folks, it's much, much less an issue for the back end folks, like ATE firms--i.e., Teradyne. If you're testing chips once they have been packaged, who cares if they are coming off an 8 inch or a 12 inch wafer? Not Teradyne. It also is probably not much of an issue for wafer test, since Teradyne just provides the tester--not the wafer handler systems (which probably are dependent upon wafer size.)
#2 is always something to be concerned about, but I don't believe that is currently a problem that is worth driving the stock down from the upper 50's to upper 40's.
Bottom line, a couple months from now, we are going to be looking at the current pricing and wishing we had bought more. Wasn't the stock picked up with a buy recommendation by a new analysis house just before the drop of the last few days? (By the way, for the record, I am long on Teradyne.)
Regards,
Jeff |
