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

To: The Ox who wrote (23066)	4/29/2005 1:55:04 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 95738

Re: Why is it so hard for some of our thread's participants to understand this? Probably because some of the major IC makers have either upped or reiterated their capex guidance for the year.

To: The Ox who wrote (23066)	4/29/2005 2:29:41 PM
From: etchmeister	Read Replies (1) \| Respond to of 95738

Hi Mike Forget about the projected dates and growth rates in this blurb but look at the implication by going to smaller geometries; it appears that VSEA could be one of the (early) beneficiary of Intel's transition to 65nm. On 1/3/2005 VSEA announced that they were shipping to major logic customer - the same day BofA issues a sell with target of $28 - the stock takes 20% haircut but recovers after INTC announces capex. A week ago BofA mentions that VSEA is one of the beneficiaries of INTC 65 nm transition. The number of implants is almost tripling from 130nm to 65nm and in case VSEA is a new supplier to INTC it's a pretty good boost; I don't think that this automatically means that they need 3X more implanters but for sure they need more on a relative base. Now in case the number of implants steps increases it also implies the number of metrology steps has to increase (and TWAV is a leading supplier in case of implants). INTC is projected meaningful production @65nm in second half of 2005 and fully ramped in 2006 - Semiconductor equipment market to rebound 2007, 2008, says analyst Peter Clarke EE Times (04/28/2005 7:38 AM EDT) LONDON — The semiconductor equipment market will start to recover in the middle of 2006 but is still set to decline by 5.0 percent in that year following a fall of 9.6 percent in 2005, according to The Information Network (New Tripoli, Pa.). Thereafter the semiconductor equipment market is set to achieve double-digit percentage annual growth of 20.5 percent in 2007 and 27.0 percent in 2008, driven by the needs of novel transistor and gate-level processing, the company said. The market research company's short-term forecast was close to the one it gave Feb. 1, 2005, when it said the market would fall 9.4 percent to $30.7 billion in 2005 after a growth spurt of 52.7 percent took it to $33.9 billion in 2004, Whereas the past semiconductor cycle focused on the back-end of the line processing utilizing copper interconnects and low-k materials, the next cycle — as the industry moves to 65- and 45-nm manufacturing processes is set to be driven by front-end of the line processes used to create ultra-shallow junctions, strained sources and drain through the use of silicon-germanium and complex gate stacks, The Information Network said. "Significantly more equipment will be needed to process the transistor at 65-nm versus 130-nm," said Robert Castellano, president of The Information Network, in a statement. "For example, it will take 17 implant tools versus only seven for the ultra-shallow junctions. For the strained silicon-germanium source-drain, five epi reactors, two etch, and two clean tools will be required at 65-nm for a process that was not even implemented at 130-nm. For the gate stack, five integrated tools will be required versus only one oxidation furnace and one poly furnace." The combined needs for these processing tools would result in annual market growth rates of following market declines of 9.6 percent in 2005 and 5.0 percent in 2006, The Information Network said. For gate-stack processing, the equipment market was $843 million in 2004. Applied Materials led the market with a 54.8 percent market share, followed by Tokyo Electron Ltd. with a 19.5 percent share and ASM International with a 10.5 percent share, the market research company said. In a few days we will get a new data point for global IC sales; inventories are at very low level. One pundit suggested for March as high as 18.4; as Gottfried pointed out this is not the official SIA figure: I can't help it but it does not appear global IC sales are going to hell in a bucket - on a global base one of the strongest cycles. st.net/~gottfriedm/SEMIcharts/chipsales_SEMIbookings.gif

To: The Ox who wrote (23066)	4/29/2005 4:32:13 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95738

Michael, The sentiment by the analysts for this sector are very negative as we have been "bombarded" with for quite some time. One of the recent changes, however, has been the negativity put forth for 2006 - ie, worse than 2005, and "they" see no recovery until 07/08. Whether this sentiment will turn out to be true, or not, the perception is that investing in this sector is going to be "dead money" for another 12 to 18 months yet. Not a conducive environment for rising stock prices. In the mean time, most companies are doing OK, and profitable, although not all of them as we know by looking at the weekly Group postings. If the earnings were really lousy, as they were back in 2002, we could probably get to the "long term" bottom that RtS is looking for. Instead, we are likely to be "mucking" around here, not doing much of anything for quite some time. Don