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

To: The Ox who wrote (11996)	10/9/2003 5:56:26 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95399

Semiconductor Equipment . . . Gartner said growth prospects for 2003 semiconductor capital equipment have "dimmed" due to slow order momentum and low second-quarter sales. Gartner now expects chip capital spending to total $29.7 billion, up 7.9 percent from 2002, but down slightly from earlier projections of $29.9 billion. "Ultra-conservatism is holding back spending on new equipment, at least for the wafer fab," said Gartner managing vice president Klaus-Dieter Rinnen. "As harsh as it might sound for capital equipment vendors, the cautious investment behavior might actually be for the better of the industry." Ultratech Stepper downgraded at Needham to Hold from Buy based on valuation. The firm says that discussions with several industry contacts suggest that laser thermal processing technology (LTP) may suffer from integration challenges in the spike anneal application. The firm also believes that early developers of 65nm process technology such as Intel and IBM are not adopting LTP for their 65nm processes, confirming their belief that the argument for adopting LTP is not as compelling as the stock reflects. Boxmakers . . . Hewlett-Packard and Disney signed a 10-year pact that includes providing consumer computing services for Disney's new Mission: Space exhibit at Epcot Center in Florida. Additionally, Morgan Stanley's Rebecca Runkle said H-P is in position for a strong fourth quarter due to a new set of consumer products. The Wall Street Journal's "Heard on the Street" column suggests Apple's iTunes music store is not necessarily a moneymaker. When the company originally introduced the store to the public, Apple's shares quickly skyrocketed from a 52-week low of around $13 to more than $20. The article suggests a repeat performance may be in the works as the company introduces the product to a wider audience next week. Currently, the service is available to just 3% of computer users with the co readying a version of the service for the 90%-plus who work in a Windows-based environment. However, the article suggests the company earns less than a dime on each song it sells from the store. Needham's analyst states, "the Music Store doesn't represent a major income opportunity for Apple". The company believes the service is a "trojan horse" to incite interest in the company's iPod music player. While there was no business update from Dell on its strategy conference call, COO Kevin Rollins was upbeat about Dell's growth prospects and competitive advantages that should enable the company to grow revenues to $60 billion by 2006 (2007). There was little new in the call today: COO Kevin Rollins highlighted Dell's structurally advantaged, low-cost model positions it well to grow share of wallet in existing markets and gain share in new large markets as they standardize. Rollins indicated if Dell were to achieve share in servers, storage, services and S&P similar to its 17%+ PC share, it would add $50 billion in annual revenues. Continue to like Dell as it remains the key beneficiary of major secular trends: 1) wireless and notebook mix shift; 2) shift from proprietary RISC/UNIX to Linux/Windows servers on low-cost hardware; and 3) growth in low-end/mid-range storage where Dell’s partnership with EMC should allow it to grow its presence – all areas where accelerating standardization plays into Dell’s model. robblack.com I think more of the threads normal contributors are posting on the AMAT no politics thread. In addition to a large number of thread participants having taken some profits earlier this year in hopes for a significant pullback we also have those who are still in cash. Don, asked a while back for more input on how we all select stocks and got virtually no answers. Perhaps more of us see this market as overvalued than we care to admit? RtS

To: The Ox who wrote (11996)	10/9/2003 7:46:10 PM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 95399

>> The thread has gotten awfully quite lately. Michael, we're all distraught over the drop in the share price of Altera. What's the deal there ? I read one analyst downgrade saying that design wins are going to ASIC's instead of FPGA's. I thought the tide was running the other way. But I have a different theory. Today ALTR and XLNX both dropped. I think these guys are fabless. And I wonder if all the talk of fabs running at 90% is giving rise to the assumption that costs will rise for the fabless chip vendors. And they will not be able to benefit from the higher margins associated with higher volumes. The benefit will go to the fab operator. I just seemed suspicious that both companies dropped on an up day like today, while a fab owner like LSI held up OK. Sarmad

To: The Ox who wrote (11996)	10/9/2003 8:28:51 PM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 95399

Michael, Yes, your are right - the thread has grown quiet. <The thread has gotten awfully quite lately. Is it that no one can believe we are still going up?> Maybe we have some more upside, but I think it is getting pretty risky. You had a nice phrase in your post: <for now the market sure looks like it wants to head higher and the rising tide is lifting most boats.> There has been a lot of good news in most sectors as the summer has progressed which has lifted "most boats", including the semi-equips. However, focusing in on the semi-equips, one could argue that little has changed for the better in the semi-equip world. Several bits of posted information suggest that this is true. As an example, Brian has just posted the following on the AMAT thread. Message 19387366 The lead-in to the article says: < It's earnings season again, but don't expect too many miracles in the slumping semiconductor equipment and materials market. Leading suppliers of semiconductor equipment and materials are expected to report their financial results over the next few weeks. Based on the early predications, many vendors will meet their 3Q forecasts--by a nose, according to a report issued this week from UBS Securities LLC.> Let's take another snip from the same article. <Applied Materials Inc., the bellwether in the industry, is expected to report its fourth-quarter and year-end results in November. The chip-equipment giant is expected to report $1.117 billion in sales for its current quarter, up 2 percent from the previous quarter but down 23 percent from the like period a year ago, according to UBS. It is expected earn $0.05 per share in the period, compared to $0.05 in the previous period and $0.09 a year ago, according to UBS.> This hardly sounds like a great performance to me - revenue down 23 percent from the like period a year ago and earnings at 0.05 compared to 0.09 a year ago. At this time last year, AMAT was selling at 10+ and now it is selling at 20+. This performance is all based on recovery, that is not evident today. From RtS's post earlier today: Message 19387324 [snip] < Semiconductor Equipment . . . Gartner said growth prospects for 2003 semiconductor capital equipment have "dimmed" due to slow order momentum and low second-quarter sales. Gartner now expects chip capital spending to total $29.7 billion, up 7.9 percent from 2002, but down slightly from earlier projections of $29.9 billion. "Ultra-conservatism is holding back spending on new equipment, at least for the wafer fab," said Gartner managing vice president Klaus-Dieter Rinnen. "As harsh as it might sound for capital equipment vendors, the cautious investment behavior might actually be for the better of the industry."> And finally, let me post the following table below showing predeicted earnings trends for the Group over the past 5 weeks. - DATA FROM FIRST CALL - 9/4/03 10/9/03 - EARNINGS EST EARNINGS EST EARNINGS CHG SYMBOL CURR YR NEXT YR CURR YR NEXT YR CURR YR NEXT YR AMAT 0.13 0.46 0.13 0.46 ASML -0.34 0.37 -0.32 0.38 0.02 0.01 ASYT -1.02 0.44 -1.02 0.50 0.06 ATMI -0.01 0.64 -0.13 0.63 -0.12 -0.01 BRKS -1.56 0.24 -1.56 0.24 CMOS -1.59 -0.41 -1.49 -0.40 0.10 0.01 COHU 0.06 0.62 0.06 0.62 CYMI -0.31 0.97 -0.30 1.00 0.01 0.03 DPMI -1.80 0.70 -1.80 0.70 EGLS -2.01 -0.71 -2.01 -0.71 FSII -1.41 -0.10 -1.41 -0.10 HELX -0.09 0.43 -0.09 0.42 -0.01 KLAC 1.03 1.80 1.03 1.86 0.06 KLIC -1.09 0.20 -1.09 0.19 -0.01 LRCX 0.37 0.92 0.39 0.99 0.02 0.07 LTXX -0.42 0.44 -0.46 0.44 -0.04 MTSN -0.60 -0.06 -0.59 -0.01 0.01 0.05 NVLS 0.18 0.67 0.18 0.68 0.01 PHTN -0.96 0.54 -0.96 0.57 0.03 PLAB -0.20 0.72 -0.20 0.73 0.01 SMTL -0.34 0.16 -0.34 0.14 -0.02 TER -0.60 0.46 -0.60 0.45 -0.01 UTEK 0.14 0.68 0.15 0.67 0.01 -0.01 VECO 0.19 0.69 0.19 0.69 WFR 0.47 0.61 0.47 0.61 TOTAL -11.78 11.48 -11.77 11.75 0.01 0.27 At the bottom line, the estimates have changed very little over the past 5 weeks. There is no projection of a recovery based on these earnings estimates for this year and next year. The market expects these to rise, but so far there is no "evidence of life" in the semi-equip sector. Maybe all these "signs" are what dampens enthusiasm on this thread?:) Don