By Jerry Fleming
<Picture: T>he grim reality of the current currency and stock market turmoil in the Southeast Asian and Japanese economies is finally catching up with the U.S. semiconductor equipment companies.
<Picture: GO TO TABLE>Semiconductor equipment makers turn out the hardware necessary to produce and assemble various types of chips, which are used in products as diverse as personal computers and cellular phones.
Since countries like South Korea, Japan and Taiwan account for more than 50% of the global semiconductor output, a disturbance in the region will rock the rest of the technology world. As it is, most U.S. semiconductor equipment makers are overexposed in the region, in some cases that exposure means that almost 60% of their revenues is from that part of the world. Last year the semiconductor equipment industry had $30 billion in annual revenue, with Asia contributing around $15 billion. Among Asian countries, Japan alone accounts for nearly 50% of the sales.
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Countries like South Korea, Japan and Taiwan account for more than 50% of the global semiconductor output.
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After Kulicke & Soffa (KLIC), a Willow Grove, Pa.-based equipment company announced that it would miss its fourth-quarter analyst earnings estimate of 38 cents a share. Kulicke & Soffa stock fell sharply. By the end of the Dec. 11 week, the stock had tumbled 33.5% and investors should expect the news to get only worse.
It is only a matter of time before Kulicke & Soffa's peers--companies such as Applied Materials (AMAT), Lam Research (LRCX) and Novellus Systems (NVLS)--also show the effect of the Asian calamity. |
