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

To: sixty2nds who wrote (29306)	3/13/2006 10:07:52 AM
From: sixty2nds	Respond to of 95806

09:11 AMAT RBC Capital channel checks suggest Samsung is likely to place PVD Copper barrier/seed (PVD cu) tool orders with Applied Materials instead of Novellus (17.79 ) The firm believes that Applied already has one PVD tool in place and is likely to receive another 2-3 tool order soon. In the near term, the firm sees about a $10M loss for Novellus and an equivalent gain for Applied, which is too small to warrant any estimate changes. Going forward, the firm believes that PVD Cu decisions will increasingly be driven by pricing and bundling considerations, which will likely favor the larger and more aggressive Applied Materials. The improvement in gross margins during 2006, which they are modeling for Novellus, will be in jeopardy if the company elects to aggressively gain market share, as the firm believes that price will be a significant decision factor for customers, going forward. Novellus management may elect to not fight with price, and in that case, the firm would not expect a sizeable improvement in PVD Cu market share. The firm is making no change to their view on semiconductor equipment stocks including AMAT and NVLS. The firm continues to recommend that investors take profits and adopt an underweight stance on semiconductor equipment stocks.