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

To: Gottfried who wrote (8358)	12/19/2003 9:41:42 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

U.S. Electronics Output Up By James Haughey, Director of Economics, Reed Business Information -- Electronic News, 12/19/2003 The Federal Reserve Board reported that manufacturing surged 0.9 percent in November, led by a 6.1 percent jump in semiconductor and electronic output. At this pace chip output would double in a year. Manufacturers of computers, storage devices and peripherals raised November output 2.6 percent. The gain for semiconductors and computers includes more parts, as well as more content, function or speed per part. Telecom manufacturers increased production 1.0 percent from October, mostly more parts rather than more content per part. Electronics end markets also picked up strongly last month. Industrial machinery production soared 2.5 percent after no net change over the previous year. Motor vehicle output slipped 0.3 percent, but that appears to be temporary because dealers' sales recently have revived with aggressive discounting. Overall, durable goods manufacturing increased 1.4 percent in November and has surged at a 16 percent annual pace in the last three months. Separately, the Labor Department reported that the consumer price index, excluding food and energy, declined 0.1 percent last month. The underlying inflation rate has dipped to about 1 percent. This is the flip side of recent huge labor productivity gains. This assures that cheap credit will last well into 2004, keeping both consumption and investment spending growing much stronger than average. Also, the Census Bureau reported that housing starts soared to a 2.07 million annual rate in November, about 20 percent higher than expected. Although this may be the peak of the housing cycle, it assures that the huge construction sector will be growing strongly at least through the winter. Forget all of the economic and market outlooks you saw in the last few months. They have been outdated by the flurry of astonishingly strong economic reports over the last month. A few months ago the consensus GDP forecast for the US in 2004 was 3 percent to 3.5 percent growth. Now it is pushing 5 percent. Market forecasts need to be adjusted accordingly.

To: Gottfried who wrote (8358)	12/19/2003 2:20:39 PM
From: Proud_Infidel	Respond to of 25522

Capital spending to jump 28% in 2004, says Gartner By Silicon Strategies 12/19/2003 1:55 PM EST STAMFORD, Conn.--A strong acceleration in chip demand at the end of 2003 is expected to spill over and drive capital spending in 2004, according to a quarterly forecast from Gartner Inc. here today (December 19, 2003). Worldwide semiconductor capital spending is projected to hit $37.1 billion in 2004, up 27.9 percent from $28.9 billion in 2003, according to market research firm Gartner. In 2003, worldwide semiconductor capital spending is expected to increase 5.7 percent over 2002. Capital equipment spending is expected to total $29.5 billion in 2004, up 35.9 percent from $21.7 billion in 2003. Capital equipment spending is supposed to grow 5 percent in 2003 over 2002. The worldwide capital equipment market includes wafer fab equipment, packaging and assembly equipment and automated test equipment, according to the Stamford-based firm. The backend segment continues to drive the current fab-tool recovery. The packaging and assembly equipment market is expected to jump 37.7 percent next year, from $2.9 billion in 2003, to $4 billion in 2004. In 2003, the packaging and assembly market is projected to grow 24.7 percent over 2002. After a major slump, the automatic test equipment (ATE) industry is projected to grow 46.4 percent next year, from $2.4 billion in 2003, to $3.5 billion in 2004, according to Gartner. In 2003, the ATE industry is expected to grow 8.7 percent over 2002. This is not to say that growth has stalled for front-end wafer-fab equipment (WFE). The WFE market is projected to grow 34.1 percent in 2004 to $22 billion, up from $16.4 billion in 2003, according to the report. In 2003, the WFE market is supposed to grow a mere 1.6 percent over 2002. "The outlook for 2004 is bright," said Klaus-Dieter Rinnen, managing vice president for Gartner's semiconductor manufacturing and design research group, in a statement. "The return of a corporate investment cycle, a PC upgrade cycle that is gaining steam, a broad-based recovery in end-user applications, low inventories and tight manufacturing capacity all are converging to provide for strong growth in all equipment segments." There is also good and bad news for the industry. Chip demand continues to increase, inventory levels remain at healthy levels, and average selling prices (ASPs) are stabilizing, he said. But capital spending remains stalled as device manufacturers remained cautious in 2003. The combination of cautious investment and rising production has driven utilization rates upwards across the board. Gartner estimates that 2003 will end with worldwide utilization about 90 percent and leading edge utilization in excess of 95 percent. "These trends should continue through 2004 and well into 2005 as manufacturers finally begin to invest heavily in response to increased end market demand and improved profitability," Rinnen said. "The industry needs more capacity if it is going to continue to meet increased device demand. However, running a fab at high utilization rates leads to high margins and profits, something the industry has been in short supply of for the past few years. As a result, semiconductor manufacturers are playing a risky game-- maximizing profitability, while assuming they can wait until the last minute to commit resources for new capacity," he said. "For 2004, global capital spending is expected to increase by 28 percent, however, the big question is will the orders for new equipment be released fast and early enough to avoid shortages on the device market," Rinnen said. "While we have seen encouraging increases in the order rate for new equipment in the past few months, it is still too early to tell. There is still the question as to whether the equipment industry can respond fast enough to the anticipated demand for new equipment. However, it has proven time and time again that it can rapidly ramp its shipment rate in response to an explosion of orders, and we expect it will do so again, provided the explosion occurs," he added.

To: Gottfried who wrote (8358)	12/19/2003 2:20:40 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

Capital spending to jump 28% in 2004, says Gartner By Silicon Strategies 12/19/2003 1:55 PM EST STAMFORD, Conn.--A strong acceleration in chip demand at the end of 2003 is expected to spill over and drive capital spending in 2004, according to a quarterly forecast from Gartner Inc. here today (December 19, 2003). Worldwide semiconductor capital spending is projected to hit $37.1 billion in 2004, up 27.9 percent from $28.9 billion in 2003, according to market research firm Gartner. In 2003, worldwide semiconductor capital spending is expected to increase 5.7 percent over 2002. Capital equipment spending is expected to total $29.5 billion in 2004, up 35.9 percent from $21.7 billion in 2003. Capital equipment spending is supposed to grow 5 percent in 2003 over 2002. The worldwide capital equipment market includes wafer fab equipment, packaging and assembly equipment and automated test equipment, according to the Stamford-based firm. The backend segment continues to drive the current fab-tool recovery. The packaging and assembly equipment market is expected to jump 37.7 percent next year, from $2.9 billion in 2003, to $4 billion in 2004. In 2003, the packaging and assembly market is projected to grow 24.7 percent over 2002. After a major slump, the automatic test equipment (ATE) industry is projected to grow 46.4 percent next year, from $2.4 billion in 2003, to $3.5 billion in 2004, according to Gartner. In 2003, the ATE industry is expected to grow 8.7 percent over 2002. This is not to say that growth has stalled for front-end wafer-fab equipment (WFE). The WFE market is projected to grow 34.1 percent in 2004 to $22 billion, up from $16.4 billion in 2003, according to the report. In 2003, the WFE market is supposed to grow a mere 1.6 percent over 2002. "The outlook for 2004 is bright," said Klaus-Dieter Rinnen, managing vice president for Gartner's semiconductor manufacturing and design research group, in a statement. "The return of a corporate investment cycle, a PC upgrade cycle that is gaining steam, a broad-based recovery in end-user applications, low inventories and tight manufacturing capacity all are converging to provide for strong growth in all equipment segments." There is also good and bad news for the industry. Chip demand continues to increase, inventory levels remain at healthy levels, and average selling prices (ASPs) are stabilizing, he said. But capital spending remains stalled as device manufacturers remained cautious in 2003. The combination of cautious investment and rising production has driven utilization rates upwards across the board. Gartner estimates that 2003 will end with worldwide utilization about 90 percent and leading edge utilization in excess of 95 percent. "These trends should continue through 2004 and well into 2005 as manufacturers finally begin to invest heavily in response to increased end market demand and improved profitability," Rinnen said. "The industry needs more capacity if it is going to continue to meet increased device demand. However, running a fab at high utilization rates leads to high margins and profits, something the industry has been in short supply of for the past few years. As a result, semiconductor manufacturers are playing a risky game-- maximizing profitability, while assuming they can wait until the last minute to commit resources for new capacity," he said. "For 2004, global capital spending is expected to increase by 28 percent, however, the big question is will the orders for new equipment be released fast and early enough to avoid shortages on the device market," Rinnen said. "While we have seen encouraging increases in the order rate for new equipment in the past few months, it is still too early to tell. There is still the question as to whether the equipment industry can respond fast enough to the anticipated demand for new equipment. However, it has proven time and time again that it can rapidly ramp its shipment rate in response to an explosion of orders, and we expect it will do so again, provided the explosion occurs," he added.