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Technology Stocks : ASML Holding NV -- Ignore unavailable to you. Want to Upgrade?

To: niek who wrote (1077)	1/26/2006 1:51:23 PM
From: niek	Respond to of 43297

Chipmakers hike investments; equipment stocks up. Thur Jan 26, 2006 AMSTERDAM (Reuters) - Some of the world's largest electronic chipmakers expressed confidence in this year's prospects by increasing investment budgets, boosting shares in chipmaking equipment firms such as Netherlands-based ASML. ASML shares rose on Wednesday, outperforming semiconductor peers, after Franco-Italian chip maker STMicroelectronics, Europe's second-biggest chipmaker and the world's fifth-largest, said it planned $1.8 billion in capital expenditures in 2006, up from $1.44 billion in 2005. Hynix from South Korea, the world's ninth biggest chipmaker, said earlier on Wednesday it would double its capital 2006 investment budget to 3.6 trillion won ($3.5 billion) from 1.77 trillion the year before. Shares in ASML, the world's largest maker of semiconductor lithography machines which map out electronic circuits on silicon wafers, hit a 3.5-year high earlier this month on expectations of a sustained semiconductor sector recovery. ASML's customers include almost all the world's top 20 chipmakers such as Intel Corp, which raised its investment budget for 2006 by 19 percent to $6.9 billion despite disappointing earnings as it could not meet demand last year. The investment charge is led by makers of flash memory chips used in MP3 digital music players, digital cameras, cell phones and other portable electronics, sales of which are booming. ASIAN MEMORY CHIPMAKERS CHARGE AHEAD Hynix is the world's second-biggest memory chipmaker. Powerchip from Taiwan also said it would double its capital spending budget to $2 billion. Nanya, also in Taiwan, will more than double investments to $200 million from $80 million. "That's good news for ASML," said analyst Jeroen Bos at J.P. Morgan in London, adding that flash memory chipmakers are in a race to make their chips as small as possible and that they need ASML's most expensive machines, costing 25 million to 30 million euros ($30.7-$36.8 million) each, to make those. ASML's smaller rivals are Nikon Corp and Canon Inc from Japan. While their lithography machines are the heart of the chip production process, other equipment vendors will benefit too, such as U.S.-based Applied Materials. Flash memory cards as small and thin as a thumbnail already contain as much as 1 Gigabyte worth of data, enough to store all the street maps of Europe or hundreds of MP3 songs. Chipmakers hope that by making the chips and cards even smaller and cheaper, they will find new buyers to absorb their extra output. Fourth-quarter earnings reports are traditionally the moment when chipmakers unveil the coming year's investment plans. Infineon, the troubled German maker of memory chips to cell phone chips maker from Germany that ranks as the world's seventh-largest, is the exception to the rule that memory chipmakers are boosting their budgets. It plans to keep the figure steady at around 1.37 billion euros. Outside the memory chip segment, most top 10 semiconductor chip producers were more cautious, because growth may be more modest for chips that power consumer electronics devices after an unexpectedly strong 2006. Texas Instruments, the world's third-largest chipmaker and the leading cell phone chip producer, plans to keep its investments steady at around $1.3 billion. Philips will look to lower its overall capital spending budget to below 2005's 1 billion euro level as it increasingly outsources production to contract chipmakers such as TSMC. TSMC has said it will increase its capital investments in 2006. Samsung Electronics from South Korea, the second-biggest chipmaker in the world and the leading memory chipmaker, did not split out its chip investment budget.