WSTS lowers IC forecast for '11
Mark LaPedus
(looks like other can do the math as well - up the actual growth in hint side than lower relative growth rate going forward while absolute growth going forward actually increases compared to original forecast - that (analyst) game is getting old)
When Deutsche Bank downgraded the equipment sector the sector reversed:
Semi Caps: Deutsche Bank Turns Bearish; Cuts Multiple Ratings
By Eric Savitz
Deutsche Bank analyst Peter Kim this morning turned cautious on the semiconductor equipment sector, issuing a Sell rating on the sector, and cutting his stance on a number of individual issues.
“Leading into Q3 earnings, our checks indicate semicap equipment shipments were on pace to drive solid results for the quarter,” he writes in a research note. “[This] coupled with growing expectations for further spending among foundries as they compete for market share helped to drive a surge in [semiconductor equipment] stocks. However, industry fundamentals deteriorated in the quarter ([with a ]sharp drop in memory contract prices and slowing PC related segments). We believe [the] Q4 outlook will be tempered by weaker fundamentals and accordingly downgrade the sector.”
Adds Kim: “We are not convinced CapEx will increase in 2011, but even if it were, we still expect a spending gap to mid 2011 when new fab shells are set to open. Hence, we look for [the] stocks to pull back.”
Here’s a rundown on his specific stock moves:
* Lam Research (LRCX): To Sell from Hold.
* Novellus (NVLS): To Sell from Hold.
* KLA-Tencor (KLAC): To Sell from Hold.
* Varian Semiconductor (VSEA): To Hold from Buy; target to $26, from $42.
* Applied Materials (AMAT): Maintains Hold rating; target to $11, from $12.50.
In today’s trading:
* LRCX is down $2.64, or 6.4%, to $38.80.
* NVLS is down 90 cents, or 3.4%, to $25.61.
* KLAC is down $1.79, or 5.1%, to $33.21.
* VSEA is down $1.22, or 4.2%, to $27.84.
* AMAT is down 19 cents, or 1.6%, to $11.54.
12/1/2010 2:15 PM EST
SAN JOSE, Calif. - The World Semiconductor Trade Statistics (WSTS) group has altered its IC forecasts. The group raised its forecast for 2010, but lowered it for 2011.
The WSTS forecasts the semiconductor market will grow by 4.5 percent to $313.8 billion in 2011, following an estimated 32.7 percent increase to $300.4 billion in 2010.
The new forecast presents a ''more optimistic estimate'' for the year 2010, reflecting an increase of $9.4 billion over the WSTS Spring forecast. The industry is now expected to top $331.5 billion in 2012, with a three-year compound annual growth rate of 13.6 percent from 2009 to 2012.
In June, the WSTS organization raised its forecast for the annual growth of the semiconductor chip market. It projected that the semiconductor market will reach a value of $291 billion in 2010, representing growth of 28.6 percent compared with the market in 2009.
At that time, WSTS, which collects sales numbers from many of the world's leading chip vendors and calculates global sales from these numbers, said that 2010 growth will be followed by much lower growth of 5.6 percent in 2011 and 4.2 percent in 2012. This contrasted with its previous prediction that 2010 would show growth of 12.2 percent in 2010 and 9.3 percent in 2011.
Last month, the Semiconductor Industry Association (SIA) changed its IC forecast. VLSI Research Inc. recently revised its projections for the chip and chip equipment markets in 2011 and 2012. The firm said it now expects chip sales to increase only 4.4 percent to $248.6 billion in 2011 and grow an additional 7.9 percent in 2012. VLSI previously said it expected chip sales to grow by 8 percent next year.
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3 Comments
Comments
hkdigital1
12/1/2010 3:57 PM EST
Let's do the numbers...
Mark, I wonder why you often present industry news in a negative way "WSTS lowers IC forecast", orders "fall off a cliff" ...
So, the June forecast was for 5.6 percent growth in 2011 from $291B in 2010. My calculator shows
291 x 1.056 = 307.8 or $307.8B
The new WSTS growth forecast is for 4.5 percent growth from $300.4B = $313.9B
So actually WSTS has increased their prediction for 2011 by $4 billion.
In my book, slowing growth is still growth and thats positive. |
