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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (5703)	9/28/2002 7:17:03 PM
From: Donald Wennerstrom	Read Replies (4) \| Respond to of 95572

Zeev, I think you have a very good point - over a period of time, chip equipment sales(both number of chips and/or dollar value) should have a direct "correlation" with semi-equip sales. As you point out, << I don't have historical data on the semi-equip/chip shipments, in mid 2000 it got out of hand exceeding I believe 20% or so, and right now my guess is that it got out of hands on the down side, barely making the 6% to 7% level.>> there have been distortions, on the upside and on the downside, but now that we are on the "downside", the semi-equips should be correcting back to the "mean". Also, I seem to recall that the rate of chip sales have been higher recently than they were several months ago. As long as this holds true, ie, there is not a too large a dip in sales - if any - in front of us, the semi-equips have reason to move higher. As a matter of fact, I sort of answered my own question by going to the SIA site and reading their latest press release. semichips.org Here is an excerpt from the article: <<SAN JOSE, Calif. – September 3, 2002– SAN JOSE, Calif. – September 3, 2002 – Global chip sales reached $11.7 billion in July, a 2.9% increase over the June level of $11.4 billion, the SIA announced today. On a year-to-year basis, chip sales in July were up 8% from the $10.8 billion in revenue recorded in July 2001, the first year-over-year increase registered since February 2001. “The July data, and the year-on-year increase, confirm that a moderate but sustainable recovery continues, putting us on track for 7-9% sequential growth in the third quarter,” said SIA President George Scalise. “Growth continues to be most robust in the digital consumer market, including DVDs, video games and digital cameras, as reflected in increased demand for standard cells, consumer ASP’s, optoelectronics and flash memory chips in the month.” Wireless communications also recorded an increase, spurred by brisk growth of handsets in Asia and consumers embrace of 2.5G technology. Wired communications, which include routers and networking equipment, are growing as inventory run-downs draw to a close and manufacturers are now relying on new shipments to sustain consumption. Although the PC sector grew modestly, it continues to lag historical trends, reflecting subdued IT investment levels. As inventories and supply and demand come into balance, the pricing environment has stabilized. On a regional basis, Japan, once again the fastest growing market due to higher demand for digital consumer products, recorded an 8.5% increase in chip sales in July. The Asia Pacific market registered 2.3% growth, as the strength of consumer electronics and demand for wireless handsets outweighed continuing weakness in the PC sector. Chip sales in the Americas and Europe were essentially flat, reflecting weak PC demand in both markets, and continued outsourcing to the Asia Pacific region. For the year as a whole, worldwide chip sales are expected to exceed 2001 levels by 3%. The industry continues to forecast accelerated growth rates exceeding 20% in both 2003 and 2004, led by rapidly increasing demand for digital consumer and wireless products, as the consumer and communications revolution continues to unfold.>>

To: Zeev Hed who wrote (5703)	9/28/2002 10:42:50 PM
From: Sam	Read Replies (1) \| Respond to of 95572

Zeev, What about companies like TER, LTXX, ASYT or BRKS? They have all been much more decimated than the companies you mention; three are now in single digits and the fourth may be there by sometime next week if things keep going the way they are. Shouldn't their potential gains be greater from their lower valuation than AMAT, NVLS, KLAC and CYMI? Don't the lower valuations adjust for the added risk they might have? I tentatively concur with your comments on timing--seems like we are getting to a nice buying opportunity, though I still think we have lower to go in October. Between the elections and Iraq (not to mention little items like a frozen economy, of course--don't have to mention that, as Sec. O'Neill has assured us that Q4 GDP will be 3-3.5%), it seems to me that there has to be some more decline. FWIW (probably not much). TIA for your thoughts, Sam

To: Zeev Hed who wrote (5703)	9/29/2002 12:34:06 AM
From: Pink Minion	Read Replies (1) \| Respond to of 95572

>> I don't have historical data on the semi-equip/chip shipments, in mid 2000 it got out of hand exceeding I believe 20% or so, and right now my guess is that it got out of hands on the down side, barely making the 6% to 7% level. What data are you looking at? 6% in not even close. From memory: 2000 semi sales were 215B and equipment 40B which is 18.5% 2001 sales were 139B and equipment 28B which is 20% - this is more 2002 semi sales look flat and doubt equipment to be 9B for your 6%.