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

To: BMcV who wrote (17910)	8/10/2004 8:57:29 PM
From: Alastair McIntosh	Read Replies (3) \| Respond to of 95656

Re: CSFB and others have been using strong earnings reports as evidence that the coming slowdown will come sooner rather than later. CSFB have said nothing of the kind. For the last six months or so, CSFB has been forecasting flattening demand for Q3 and Q4 and flat to down equipment sales in 2005. From their 9 July Quarterly preview: Supply growth re-accelerates in 2H. We believe that incremental supply could increase faster than incremental demand – our bottom up model is pointing to a ~3.3% q/q increase in CAPACITY in 3Q04, versus historical seasonal WAFER STARTS increase of ~1.2% q/q in 3Q (see SCE Weekly, “Industry Supply Model Update”, May 26). Another factor – improving 0.13um yields and shrinks could drive actual realizable capacity higher. In addition, flexible capacity – ie the type offered by foundries, is expected to increase even faster in 3Q. For example, in 3Q and 4Q04, UMC’s capacity will increase ~13% q/q and 7% respectively; and TSMC’s will increase 8.7% and 8% respectively, versus the ~5% q/q growth in capacity in 2Q04. 2Q04 could represent a peak in utilization for the industry. Their forecast may not be correct but so far I haven't seen anything that suggests they are wrong.