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

To: Trevor Goodchild who wrote (36065)	7/26/2000 4:54:53 PM
From: Fred Levine	Read Replies (1) \| Respond to of 70976

This is recent from WSJ, but not today...These are the best stock pickers' recommendations. July 25, 2000 Semi-Equipment Manufacturing By KHANH T.L. TRAN Staff Reporter of THE WALL STREET JOURNAL Last year's turnaround in the semiconductor-manufacturing equipment industry possibly could be explained by one idea: Moore's Law. Named after Intel co-founder Gordon Moore, this theory asserts that the number of transistors that can be squeezed onto a piece of silicon doubles every 18 months. The result is that generations of faster and cheaper microchips drive technological progress, and chip makers in turn must buy new equipment every two years to replace machines that have become obsolete. "Clearly this is a very cyclical business," said Tia-min Pang of SG Cowen Securities, who tops the list of the sector's stock pickers in this year's Best on the Street Analysts Survey. Born in Calcutta, India, and reared in Liverpool, England, Mr. Pang, 42 years old, received his doctorate from Oxford University and spent nearly two decades working as an engineer at various chip companies in Europe and the U.S. Mr. Pang said he began noticing an upturn in the chip-making equipment industry in late 1998, and upgraded the sector early last year at about the time Intel announced its 1998 fourth-quarter results and provided estimates for 1999 spending on chip-making equipment. While Intel's budget "didn't look all that fantastic," Mr. Pang said, it implied strong sequential growth for chip-equipment makers. Mr. Pang expects the current upturn will last at least another 18 months, and that the semiconductor-equipment companies will record peak revenue and orders during 2001. Companies that Mr. Pang recommends as "strong buys" include Teradyne, Brooks Automation, Credence Systems and Applied Materials, which is his top choice for the coming 12 months. Because it is the largest supplier of chip-making equipment, Applied Materials stands in the best position to benefit from advances in semiconductors, such as chips made with copper instead of aluminum as a conductor, Mr. Pang said. But Mr. Pang added that he likes companies that evolve to target new markets, rather than riding the rising economic tide like boats. Case in point: Credence Systems, a supplier of automated test equipment. Mr. Pang said that two years ago Credence was focusing on the low end of the chip-equipment market. Today, however, the company offers products in three different markets, including higher-priced mixed-signal testers, or machines used to develop chips for the fast-growing communications sector. Gunnar Miller of Goldman Sachs also is bullish on Applied Materials and Teradyne. Not only does Teradyne show strong momentum for orders of its automated test equipment, but it also is expected to introduce half a dozen new products by the end of the year, said the 35-year-old analyst, who also was a top finisher for earnings-estimate accuracy. Mr. Miller credited his childhood pastime of building radios with giving him first-hand experience in learning Moore's Law. With a limited allowance, he bought an electronics kit that in a few years became outmoded with the introduction of more advanced technology, he recalled. Mr. Miller also recommends Lam Research, a maker of wafer-fabrication systems, because it has restructured its business and returned to profitability. Third-place finisher Milind M. Bedekar joined Donaldson, Lufkin & Jenrette earlier this year from Salomon Smith Barney. He too said he likes Credence, because it offers a broader mix of products and relies on the personal-computer industry for only 20% of its sales. Mr. Bedekar, a 34-year-old father of two who holds a doctorate from Rutgers University in New Jersey and an engineering degree from the India Institute of Technology, worked in Applied Materials' product-development group for nearly three years. In addition to Applied Materials, he recommends Lam Research, which is still in turnaround. fred