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

To: Proud_Infidel who wrote (8444)	1/12/2004 7:57:20 AM
From: Proud_Infidel	Respond to of 25522

Chip sales seen growing 33 pct this year -survey Monday January 12, 4:22 am ET AMSTERDAM, Jan 12 (Reuters) - Global revenue from semiconductor sales could rise by 33 percent to $189.6 billion in 2004, driven by a 20 percent increase in output, a research group said on Monday. Makers of chip manufacturing equipment stand to benefit as chip producers would need to invest in new production capacity, it said. "The chip making industry finished 2003 with an 18.4 percent increase in sales over 2002," VLSI Research said in a note. "Conditions are ripe for the upturn. For chip makers, three years of withholding on IT upgrades will result in a boom similar to the 1999-2000 'year 2000' phenomenon." Decisions by Microsoft (NasdaqNM:MSFT - News) to stop supporting old Windows software programmes would force companies to buy more powerful PCs to run newer versions of Windows, while consumers were upgrading their cellphones and buying new gadgets such as digital music players and DVD recorders, VLSI said. Chip makers have run their factories at around 90 percent of total capacity in 2003. The demand spike can only be met if they invest aggressively in new production equipment. "After several years of under-investment, chip makers hit their capacity stops in November. Expect a major expansion in 2004, with annual growth for the chip equipment market of the order of 40 percent," VLSI said. This should bode well for market leaders such as U.S.-based Applied Materials (NasdaqNM:AMAT - News) and Dutch firm ASML (Amsterdam:ASML.AS - News). Equipment sales will increase to $43.5 billion, evenly spread between core lithography, where ASML is present, and other steps in the manufacturing process, VLSI said. "This represents a turning point from one of the longest and deepest downturns in industry history," VLSI said. Equipment sales in 2003 were half of their peak in the year 2000. The revenue rise would be led by higher prices, not big volume increases, as equipment vendors would have problems boosting output after they slimmed down in the downturn. ASML is set to report its full-year 2003 results on Thursday.