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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Fred Levine who wrote (838)	4/19/2002 2:41:00 PM
From: Proud_Infidel	Respond to of 25522

Thanks Fred, Had a great time, but it went way too fast. ********************************** Fewer chip makers are willing to join $1 billion capex club this upturn By J. Robert Lineback Semiconductor Business News (04/19/02 08:59 a.m. EST) The purse strings on semiconductor capital spending are being unloosen a bit by some manufacturers as signs of a market recovery grow, but new forecasts still show 2002 as being another downer year in terms of investments in chip factories worldwide. New estimates from market researchers at IC Insights Inc. this week show only seven chip companies planning at least $1 billion in capital expenditures in 2002 vs. nine in the downturn year of 2001, and 19 in the boom times of 2000. Cutbacks in spending and shifts to outside foundry capacity has shuffled the Top 10 ranking of capital spenders (see table below). Worldwide semiconductor capital spending in 2002 is now expected to decline in a range of 15-to-20%, pushing the total down to $29.9-to-$31.8 billion this year from $37.4 billion in 2001, said the new forecast from IC Insights. However, the Scottsdale, Ariz.-based research firm also said the 2002 decline in semiconductor capex will most likely be less than previous expected--closer -15%--because chip producers are reviewing and some are increasing their investment plans from the original budgets set at the start of this year. Other analysts are also revising their 2002 chip capital spending forecasts, primarily because of recent increases in budgets at Taiwan silicon foundries and the race to build new plants in China. A recent industry survey by Lehman Brothers Equity Research in New York shows worldwide semiconductor capital spending expected to drop 24% in 2002 after a 39% in 2001. The previous survey had predicted a 29% drop in capex, said analysts at Lehman Brothers this week. Lehman Brothers noted that in the past few recovery cycles, capital spending had been driven by 12-to-18 semiconductor manufacturers, spending in excess of $1 billion per year, but the upcoming upturn will "likely see capital spending concentrated among a select few chip makers," said a newsletter this week. Consequentially, the next upturn will benefit fewer semiconductor equipment suppliers tied to those few chip makers planning expansion, the newsletter told investors. The new forecast from IC Insights agrees that fewer chip makers are willing to spend big in the early stages of the apparent 2002-2003 recovery. Only one chip maker--silicon foundry giant Taiwan Semiconductor Manufacturing Co. Ltd.--has announced a significant hike in spending plans since the start of the year. Last month, TSMC said it had increased its capex budget to $2.57 billion--nearly a $1 billion hike--from its original $1.65 billion target (see March 28 story). In the wave of quarterly results issued this week, other chip makers have indicated that they have nudged up their capital spending plans after seeing good signs in the first three months of 2002. For example, Singapore's Chartered Semiconductor Manufacturing Pte. Ltd. today said it was increasing its capital spending from $400 million to $500 million in 2002 and moving up the start of its delayed 300-mm fab to the third quarter of 2003 (see today's story). Also this week, Motorola Inc.--which has dramatically cut its chip capex in recent years under an "asset light" outsourcing strategy--indicated that it has added $50 million to its 2002 capital spending budget, moving the total up to $250 million. Motorola did not provide details, but company officials stressed that the company was aggressively keeping costs under control as the chip division attempts to regain profitability within the next 12 months (see April 17 story). In the new $1 billion capex club, Motorola is a missing member, which had spent $2.4 billion on semiconductor plants in 2000. Also missing from the $1 billion club are: Texas Instruments, Infineon, Philips, Hynix, and a more than a half dozen Japanese chip makers--Hitachi, NEC, Toshiba, Sony, Fujitsu, Matsushita, and Mitsubishi, according to IC Insight's new ranking. Top 10 chip capital spenders 2002 Rank 2001 Rank Company 2002 (% change) 2001 (% change) 2000 (% change) 1. 1. Intel $5.500 billion (-25%) $7.309 billion (+10%) $6.674 billion (+96%) 2. 2. TSMC $2.570 billion (+17%) $2,200 billion (-56%) $5.000 billion (+171%) 3. 4. Samsung $1.400 billion (-22%) $1.800 billion (-42%) $3.100 billion (-72%) 4. 8. IBM $1.250 billion (-7%) $1.350 billion (0%) $1.350 billion (+42%) 5. 6. STMicro $1.200 billion (-29%) $1.700 billion (-48%) $3.300 billion (+145%) 6. 7. Micron $1.000 billion (-29%) $1.200 billion (-1%) $1.415 billion (+60%) 7. 9. UMC $1.000 billion (-17%) $1.200 billion (-57%) $2.800 billion (+63%) 8. 13. AMD $815 million (+20%) $679 million (-16%) $805 million (+30%) 9. 3. Infineon $800 million (-58%) $1.900 billion (+15%) $1.650 billion (+86%) 10. 5. TI $800 million (-55%) $1.790 billion (-35%) $2.762 billion (+98%) IC Insights Inc.