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

To: Donald Wennerstrom who wrote (15829)	6/18/2004 3:59:47 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95502

Here is the CSFB "take" on the BtB <<SEMI May B:Bill; Charts A Downward Path; June Expected To Drift Lower • May B:B weakens. SEMI reported the May book to bill overnight. The book to bill declined to 1.11 from a revised 1.13 in April. We were estimating a B:Bill of 1.10, First Call consensus was 1.13. Bookings of $1577 mm declined 0.3% m/m versus our estimate for a 3.1% m/m decline, and consensus for 2.4% growth. Billings of $1422 mm increased 2.0% m/m versus our estimate for 0.4% m/m growth and consensus for 2.6% growth. Contrary to consensus, we anticipated a lower ratio and lower bookings in May, with the recent pickup in April order growth better explained by easier compares than an accelerating order environment. • Downtick in the front and back end. The front end book to bill was 1.09, in line with our estimate though below consensus for a flat B:Bill of 1.12. FE orders were flat m/m, but excluding a $12 mm upward revision to April, would have declined 1.2% m/m. The back end book to bill was 1.18, down from 1.19 in April, though above our estimate of 1.12 and consensus of 1.17. BE orders held up better than we expected, down 1.3% m/m versus our estimate for down 5% m/m. In spite of the modestly weaker results, we view the book to bill as mostly a non-event for stocks. • June expected to drift lower. At the reported May levels, orders are tracking up 14% sequentially in C2Q, implying that (1) C2Q orders are tracking with upside, and/or (2) June SEMI orders will show m/m declines. Based on our field checks, we believe C2Q orders have upside into the low-teens versus our official estimate for 8-10% q/q growth, which would still cause orders to decline mid-single digits in June. • Should stabilize around parity. Our belief has been that accelerating WFE supply growth the past 2 quarters, manageable lead times, and seasonal end demand would cause a slowdown in order rates and cause the book to bill to come in further in May and June. Rational spending by chip companies could cause the book to bill to bounce around at these levels. Key items to monitor include the inventory cycle for chips, fab utilization, and 2H demand trends.>>