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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Fred Levine who wrote (35524)	6/21/2000 8:09:00 PM
From: Proud_Infidel	Respond to of 70976

Merrill bullish on chip equipment maker leaders Reuters, 06/21/2000 16:21 NEW YORK, June 21 (Reuters) - Semiconductor equipment companies are set to see strong order growth well into next year, analyst Brett Hodess said as he took up coverage of 10 semiconductor equipment makers for brokerage Merrill Lynch. "In fact, on average, orders could grow right through 2001 into 2002," Hodess, who recently joined Merrill Lynch from Banc of America Montgomery, said in a telephone conference call. The industry is benefiting from exploding demand for electronics such as cellphones and handheld computers, resulting in a growing shortage of key electronics components and a spurt in demand for new chip production equipment. Hodess said his favorite shares group dominant player Applied Materials Inc. (NASDAQ:AMAT) with Lam Research Corp. (NASDAQ:LRCX), Teradyne Inc. (NYSE:TER), Novellus Systems Inc. (NASDAQ:NVLS), KLA-Tencor Corp. (NASDAQ:KLAC), Kulicke & Soffa Industries Inc. (NASDAQ:KLIC), PRI Automation Inc. (NASDAQ:PRIA), Veeco Instruments Inc. (NASDAQ:VECO), Cymer Inc. (NASDAQ:CYMI), and Advanced Energy Industries Inc. (NASDAQ:AEIS). "Novellus is our favorite for new money right now" in part because of an attractive price-earnings ratio, Hodess said. He said the Semiconductor Industry Association and Merrill Lynch had raised their estimates for 2000 growth in the last few weeks to 31 to 32 percent. Estimates for 2001 were heading to 26 to 28 percent, from a previous level of 20 percent. "I believe it will be difficult for the industry to catch up on the supply side before the second half of next year," Hodess said. "That still may be conservative." He pointed out that semiconductor fabrication plants were running at 95 percent capacity, effectively at full capacity, in the first quarter. Plants making chips of a width of 0.25 microns between transistors, the industry standard, were running all out at 98 percent capacity. The industry is moving rapidly to adopt equipment capable of building even tinier microscopic transistors. "The bottom line here is that if you look at the mix of installed capacity in the industry today, it is insufficient to meet the mix of advanced technology being demanded by semiconductor companies," Hodess said. Merrill bullish on chip equipment maker leaders Copyright 2000, Reuters News Service