Outlook for Semiconductor Capital Equipment Market Should Remain Strong Into 2002, According to Banc of America Securities' Analyst
SAN FRANCISCO, Calif., Feb. 3, 2000 /PRNewswire/ -- The following is being issued by Banc of America Securities, a member of the National Association of Securities Dealers, CRD number 26091:
The industry that bottomed in late 1998 will see 35-40 percent growth in 2000 and could post 40 percent growth in 2001 as well, according to Banc of America Securities' senior semiconductor capital equipment analyst, Brett Hodess.
(Photo: newscom.com )
"The details for the semiconductor equipment growth cycle have fallen into place," said Hodess. "Wafer fabrication utilization rates have increased for the fifth quarter in a row, to reach 95 percent."
Hodess made his comments to investors yesterday at the 17th Annual Banc of America Securities' Technology Conference, which runs through Friday, February 4th at the Ritz Carlton in San Francisco. This year's Tech Week will feature 195 presentations from public and private companies representing a broad spectrum of investment opportunities in communications services, computer and peripherals, distribution, networking, semiconductor, software and Internet industries.
Wafer fabrication utilization rates have been driven by demand in leading edge technologies with sub 0.3-micron utilization at more than 96%. Most of this capacity has come from technology upgrades. Orders for entire new semiconductor fabrication facilities should boost growth in 2001 and 2002, says Hodess.
New fab activities are much more lucrative for suppliers and make projections for the group very promising. In fact, Hodess says that today's investment outlook resembles the outlook for the semiconductor cycle in early 1993.
Consumer and communications electronics are the key drivers in this cyclical up turn in the industry. Demand is spurred by lower prices and better performance that results from advanced semiconductor production technologies. New materials are a key component of these new technologies, Hodess says.
Hodess believes that investors should evaluate large and small cap firms in this sector with different criteria. In the large cap sector, Hodess recommends low P/E stocks like Lam Research (Nasdaq: LRCX - news; LRCX, $140.00, Buy)[1] and Novellus Systems (Nasdaq: NVLS - news; NVLS, $54.38, Strong Buy)[1]. He also favors Applied Materials (Nasdaq: AMAT - news; AMAT, $148.25, Buy)[1], KLA-Tencor Corp. (Nasdaq: KLAC - news; KLAC, $65.81, Buy)[1] and Teradyne Inc. (NYSE: TER - news; TER, $74.81, Buy). In the small cap sector, Hodess is partial to companies in well-defined industries that can leverage expertise into market share growth. In the area of outsourcing, he favors Amkor Technology (Nasdaq: AMKR - news; AMKR, $38.25, Buy)[1,2], MKS Instruments (Nasdaq: MKSI - news; MKSI, $35.88, Strong Buy)[1,2], Advanced Energy (Nasdaq: AEIS - news; AEIS, $54.63, Buy)[1] and Metron Tech N.V. (Nasdaq: MTCH - news; MTCH, $22.25, Buy)[2]. Other small cap stocks he recommends include Cymer Inc. (Nasdaq: CYMI - news; CYMI, $58.88, Buy)[1,2]; Photronics Inc. (Nasdaq: PLAB - news; PLAB, $31.13, Buy)[2]; Photon Dynamics (Nasdaq: PHTN - news; PHTN, $60.00, Buy); and niche companies like Electro Scientific Industries (Nasdaq: ESIO - news; ESIO, $90.00, Strong Buy)[1] and Veeco Instruments (Nasdaq: VECO - news; VECO, $60.38, Strong Buy)[1,2].
Banc of America Securities LLC (BAS), a subsidiary of Bank of America Corporation, is a full-service investment bank and brokerage firm. With principal offices in San Francisco, New York City and Charlotte, BAS employs more than 4,000 associates in offices around the country, and with affiliates, offers capabilities worldwide.
Bank of America Corporation, with $633 billion in total assets, is the holding company for the largest bank in the United States, with operations in 21 states and the District of Columbia.
1. Banc of America Securities LLC currently maintains a market in this security.
2. Banc of America Securities LLC was manager of a public offering for the following companies in the last three years: MTCH, MKSI.
3. Banc of America Securities LLC was co-manager of a public offering for the following companies in the last three years: CYMI, AMKR, VECO.
Banc of America Securities LLC has performed investment banking or other services for the following companies in the last three years: PLAB, VECO.
In the ordinary course of business, Banc of America Securities LLC has obtained a substantial position in these companies: MKSI.
Banc of America Securities LLC is the exclusive financial advisor to Photronics, Inc., in its acquisition of Align-Rite International, Inc. PLAB.
Banc of America Securities LLC is acting as exclusive financial advisor to Veeco Instruments, Inc., in connection with its acquisition of Ion Tech. VECO.
biz.yahoo.com |
