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

To: Proud_Infidel who wrote (30685)	5/25/2006 8:13:42 PM
From: Gottfried	Read Replies (1) \| Respond to of 95391

Brian, re >VLSI believes forecasts that equipment bookings will trend downward during the second half of the year.< that is probably all investors will pay attention to.

To: Proud_Infidel who wrote (30685)	5/25/2006 9:38:55 PM
From: Donald Wennerstrom	Respond to of 95391

Brian, thanks for posting the article, but it is hard to know how to respond to some of the statements and conclusions in the article. As we all know who contribute posts to these threads, the numbers used in the articles, and what they mean, are very hard to fully understand. We are never privy to the assumptions that make up the summary statements they put forth. Part of the problem is that we do have fair insight into the NA bookings and billings on a monthly basis, but little insight into the worldwide Bookings and Billings where we get "top line" numbers thrown at us on an intermittant basis. For instance, the 209.7B thrown at us in the article does not cover the same market as the SIA worldwide sales that we are privy to every month. This year, at the present, SIA is predicting 245B sales for the year. S&P is presently predicting 255B in sales for the year. Sales for the first 3 months of this year are 59B, which is about 5B higher than the 1st 3 months of last year. Returning to the semi-equip area, I do agree with 1 statement made in the article, <<Chip makers are running out of capacity because they did not invest enough in 2005 to deal with demand, leading to a boom in equipment demand, VLSI said.>> Since they did not order enough in 2005, there is some catching up to do. How much is enough - I don't know, but so far, through April, the NA Bookings and Billings numbers seem very reasonable. Previously on this thread, the SEMI numbers through Apr, and the SIA numbers through Mar have been posted. Getting back to the lead in sentence, <<Due to stronger-than-expected first quarter growth, worldwide semiconductor capital equipment sales are expected to reach $62.8 billion in 2006, an increase of 23.2 percent from 2005, according to a forecast issued Thursday (May 25) by market research firm VLSI Research Inc.>> Based on their assertion of 23.2 percent increase from 2005, that means 2005 sales were 51B. That means they expect an increase this year of 11.8B. Based on the SEMI data for the 1st 4 months of this year(only 8 months left to go) Bookings are up by 1.5B and sales are up by 0.2B compared to 2005. If the worldwide sales are going to increase by 11.8B this year, most of it will be from other than NA companies. Total sales last year from NA companies as reported by SEMI came to 14.2B. That means that sales other than NA companies were 36.8B, about 2.5 times what is provided by NA companies. If we assume that the 11.8B increase is divided up in that ratio, NA companies will provide 3.4B of that growth, and the rest of the world will provide the remaining 8.4B of that growth. So far we are 0.2B ahead of last year's pace. In the next 8 months, the NA companies will have to increase the sales by 3.2B to do their "share". Does all that make sense? Darned if I know.<g> Don