Another ouch for semi-equips - supporting Lehman stance (post 5221) of -ve 12-13% growth this year and the big ZIPPOroni for 1999. Amazing to me and beginning to get scary for the little companies
(disclosure - I don't have any semi-equips any more - dumped with some misgivings in early Feb based on feeling that investors were getting too ga-ga about a situation that was rapidly detiorating but was nevertheless nowhere close to being fully reflected in the stock prices. Even though I first thought 0.80 was floor, then 0.75 (with realistically 0.68), now will pretty confidently predict sub 0.70 BTB this year (maybe during the slow summer once current order flow has stopped?)).
techweb.com
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Semiconductor Equipment
Spending Hits Slump Until End Of
'99, Says Report
(04/27/98; 10:48 a.m. ET)
By Staff, Semiconductor Business News
Believing the chip industry is in a period of
retrenchment, investment banker Adams, Harkness &
Hill said it is predicting flat revenues -- at best -- for
suppliers of semiconductor production equipment until
the end of 1999.
In a new industry study, the Boston-based investment
banker concluded that the industry is in a
longer-than-expected downturn and most stocks of
semiconductor capital equipment are valued too high to
make good buys right now.
"Our outlook over the next 18 months is bearish," said
the report's lead author, Frederick L. Wolf,
semiconductor equipment analyst at Adams, Harkness
& Hill.
Earlier this month, the Semiconductor Equipment and
Materials International trade group said a recent survey
of buyers in chip companies suggested purchases of
production systems in 1998 could be 12 percent lower
than last year's $27.6 billion. Industry analysts have
recently lowered their forecasts for chip-equipment
spending with most predicting no more than a 5 percent
growth this year and several calling for a 10 percent
decline.
The report by Adams, Harkness & Hill concludes that
the Asian financial crisis and a glut in the world supply
of dynamic RAM (DRAM) memory chips both will
continue to discourage integrated circuit makers from
making capital investments. The report says many chip
makers are located in Asia, which accounted for more
than half of semiconductor capital spending in 1997.
Japanese chip makers, which accounted for fully 25
percent of the industry's capital spending last year, are
unlikely to invest much in equipment before 2000
because of the economic uncertainty, according to the
study.
"With DRAM prices still going down and the financial
problems in the Far East, particularly Korea, I'm
becoming less and less optimistic that the chip
companies in the Far East will build new fabs," Wolf
said.
Early last year, semiconductor manufacturers invested
to upgrade their existing wafer fabs with 0.25-micron
process technology, but the report concludes
companies are not likely to spend as much on
equipment over the next 18 months because of the glut
of DRAM capacity and a "tenuous outlook for the
foundry business in Taiwan."
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Shane. |
