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

To: Return to Sender who wrote (31338)	7/10/2006 9:23:50 AM
From: Donald Wennerstrom	Respond to of 95737

RtS, that is good news - here is another article that is upbeat for the semi-equips, particularly for the upcoming earnings reporting in the next few weeks. << Surge in chip equipment sales sparks talk of overheating July 07, 2006 19:02:00 (ET) SAN FRANCISCO (MarketWatch) - Chip-equipment makers have been riding a wave of orders to provide machines that make memory chips used in consumer electronics, a run that's forecast to last the rest of the year as more factories come online. Increased demand for memory chip technologies known as DRAM and NAND flash is expected to help 2006 equipment sales rise 24.8% over 2005 to $42.8 billion, Gartner Inc., a Stamford, Conn.-based technology research firm, said Friday. Of that figure, DRAM and NAND-related equipment orders will account for 44% of all spending by electronics makers. But that growth is starting to raise concerns of overbuilding, capital expenditure cutbacks, and slower sales in 2007. Gartner analyst Klaus Rinnen said current spending on memory chip machines "seems like a sure-fire road to potential overcapacity" since DRAM and NAND only account for 22% of the total semiconductor revenue worldwide. "There's a real danger of overbuilding happening" as chipmakers duel for market share, especially in the NAND flash market, said George Burns, president of Strategic Marketing Associates, a Santa Cruz, Calif.-based industry research firm. The issue will be front and center in the coming week, when the industry will gather in San Francisco for Semicon West, a big industry trade show which runs Monday through Wednesday. At the event, Applied Materials Inc. (AMAT, Trade), KLA-Tencor Corp. (KLAC, Trade), and Lam Research Corp. (LRCX, Trade) will each hold meetings with analysts on their latest prospects. One example of what's at risk from the sudden growth, Burns said, is the joint venture between Toshiba and SanDisk (SNDK, Trade). The companies are expanding one factory and building another to produce NAND flash. "They're really betting on the continued success of NAND flash," he commented. The wave of new factories coming online has boosted the fortunes of these companies and others. Since 2004, electronics makers have constructed or started work on 38 factories worth an estimated $43 billion, said Burns. Leading the construction boom has been Toshiba Corp., Samsung Electronics Co., Intel Corp. (INTC, Trade), Texas Instruments Inc. (TXN, Trade), and Micron Technology Inc. (MU, Trade). Some manufacturers are retrofitting or expanding factory lines to make NAND flash, a memory chip technology finding increasing use in portable music players, mobile phones, and digital cameras. This has helped pad the order books at chip-equipment makers, who five years ago supplied few orders for NAND flash machines. While the chip-equipment industry may endure a downturn in 2007, likely starting next spring, it's expected to be short. Gartner's Rinnen estimates spending on chip machines will rev up again in 2008, a year he predicts equipment spending will hit $50.3 billion.>>