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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (5011)	6/24/2004 1:21:18 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 5867

Analyst's Couch: Lam etches to record orders By Mark LaPedus Silicon Strategies 06/24/2004, 12:40 PM ET SAN FRANCISCO--Semiconductor-equipment provider Lam Research Corp. continues to make strong gains despite being a one-product wonder in the marketplace, according to a report from American Technology Research Inc. "Lam indicated that they are likely to exceed the midpoint of its 10-15 percent sequential order growth guidance for the June quarter," said Bill Ong, an analyst with American Technology Research in San Francisco, in a report issued this week. "If Lam achieves $400 million in June quarter orders (15 percent growth), they are 30 percent away from their historic peak of $515 million," Ong said. Lam's order rate for the June quarter is expected to be between $385-to-$402 million. Ong's estimate is for 13 percent sequential growth at $395 million in orders. In the previous quarter, Lam said revenues were $231.1 million, up from $191.5 million from the previous quarter and $187.1 million a year ago. Net income was $19.2 million, or $0.13 per diluted share, compared to net income of $6.4 million, or $0.05 per diluted share, for the December 2003 quarter. "However, our order pause concerns remain," Ong said. "A more likely scenario (for Lam) is an order pause of flat orders (for the bull case) or down orders (5 percent or so for capacity rationalization) in the September quarter. Our checks indicate that it may still be early to get a September quarter order read as equipment makers are trying to determine the timing of tool placement for calendar 3Q or 4Q." Ong continues to have a "Hold" rating on Lam's stock--and for good reason. "The focus of concern for the semi equipment industry is not about the current quarter's business climate; it is clearly robust," he said. "The addressable concern is the order outlook for 3Q and 4Q 2004 as orders will inevitably plateau as sequential growth becomes more difficult to achieve." There are also some concerns about Lam, based on its orders from the current and the prior 2000 cycle. "Lam primarily sold etch products in the prior cycle as they were still trying to commercialize their second product line, CMP (chemical mechanical polishing)," Ong said. "Today, Lam's CMP tool is still being seeded in a select number of chipmakers, although one could argue the level of success given that the tool has had several false starts since 1998," he said. "Even in a more optimistic scenario, CMP orders are not likely to be significant until at least the middle part of 2005." Lam's near term orders are still reliant on etch. "Lam has been gaining share at the expense of Applied Materials and Tokyo Electron Ltd but these three etch tool makers represent more than 90 percent of the total etch market and market share among these three companies generally ranges from 30-40 percent," he said. "Simply put, Lam is unlikely to take more than a couple of share points from the other two etch tool providers."