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

To: Ian@SI who wrote (7955)	1/5/2003 6:45:02 PM
From: Ian@SI	Respond to of 95456

VLSI Research Predicts an Upbeat Year for 2003 San Jose, CA, January 6, 2003: Now that 2002 is over, it is fairly clear that the chip making industry ended the year with a 1.9% growth from 2001, while equipment makers registered a decline of 23.8%. The equipment industry recorded total revenues of $29.9B in 2002, which was less than half of 2000’s peak. VLSI Research predicts that chip revenues will increase 22% in 2003, while chip equipment revenues will grow 11.7%. It may not feel that way, but we are in an upturn. Durable goods’ buying is finally shifting from autos to IT. And consumer spending continues to be strong in spite of all the predictions to the contrary. Although communications is still dead, there is the occasional sign of life. The news may paint a dark picture, but the economy has been rising for a year now at an average growth of around 3% and the chip making industry has never declined into a sustained economic upturn. Chip makers are relatively healthy. Utilization cuts did the trick and they managed to halt the rising trend in IC inventories. Unfortunately, utilization is still a problem with equipment makers. This problem has been worsened by discounted equipment that has added leading edge capacity at basement bargain prices. The following table summarizes the results for 2002 and VLSI’s predictions for 2003: 2002 2003 Y/ Y Change WW Electronics Sales ($B) 988.7 1083.5 9.6% WW Chips IC Sales ($B) 120.7 147.5 22.2% IC Units (B) 78.9 90.0 14.1% ASP ($) 1.53 1.64 7.1% WW Chip Equipment Total Sales ($B) 29.9 33.4 11.7% Wafer Fab ($B) 17.4 19.5 12.0% Test and Related ($B) 6.4 7.6 18.9% Assembly ($B) 1.9 2.4 28.1% Spares and Service ($B) 4.2 3.8 -8.2% WW Capacity Utilization Chip Production (MSI) 3966.2 4682.5 18.1% Chip Capacity (MSI) 4895.1 5509.6 12.6% Front-End Utilization (%) 81.0 85.0 Test Utilization (%) 84.2 87.1 Assembly Utilization %) 87.9 88.2