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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (20815)	10/6/2006 9:07:35 AM
From: matt dillabough	Read Replies (1) \| Respond to of 25522

MU Micron FY07 capex spend likely front loaded, expect Lam Research to be primary beneficiary, Applied Materials also likely increasing position - UBS (17.54 ) -Update- UBS says their channel checks suggest that MU's FY07 capex spend will likely be front loaded with 59% spend in the Nov-06 and Feb-07 qtrs as it ramps all three of its fabs, Manassas, Singapore, and Lehi. Firm estimates that Lam Research (LCRX) will be the primary beneficiary. They say LCRX's orders from MU will likely double to over $40 mln per qtr over the next 2-3 qtrs from $20 mln previously, given their view that MU will need more of LCRX's "via" etchers and "trench" etchers as it manufactures DRAM/NAND chips with copper interconnects instead of aluminum which it used previously. Firm says that Applied Materials (AMAT) is also likely increasing its position in MU.

To: Proud_Infidel who wrote (20815)	10/7/2006 12:10:54 AM
From: etchmeister	Respond to of 25522

Micron downgraded on fab ramp issues Mark LaPedus EE Times (10/06/2006 4:22 PM EDT) SAN JOSE, Calif. — A research firm has downgraded Micron Technology Inc. due to lackluster results and fab execution issues. Micron (Boise, Ida.) missed Wall Street's estimates on Thursday (Oct. 5), but it also raised its capital spending for fiscal 2007. The company is ramping up a number of fabs, including plants in Virginia, Utah and Singapore. That is the root of the problem with Micron, according to one analyst. "We are downgrading the stock from 'Buy' to 'Sell' based on the increased execution risk involved in the ramp of IMFT NAND in two 300-mm fabs at one time," said American Technology Research analyst Doug Freedman, in a report. The analyst is decreasing his share price target from $20 to $14. The analyst was referring to IM Flash Technologies LLC, a joint NAND flash venture between Micron and Intel Corp. Micron is currently ramping up flash production in a fab in Boise, Ida. The company is also putting its NAND devices in production within its 300-mm fab in Virginia. And in the near future, Micron will put its NAND parts in production within its 300-mm fab in Utah. "We believe that the August quarter results are indicative of certain execution difficulties experienced while managing fab ramps and converting the core DRAM Tech joint venture fab," he said, referring to the company's Singaporean fab operation, Tech Semiconductor. Tech Semiconductor is converting from a 200- to a 300-mm fab. "The company's 7.5 weeks of inventory is a testament to the poor execution of the fabs and loading. With a hot market we would have expected to see WIP worked down and extra attention being paid to increased output," he said. "While the next quarter or two may be okay in terms of earnings strength, the outlook with increased NAND output and continued conversion of the Tech JV to 300-mm makes taking profits and waiting for a better entry point the lower risk move." Tech Semiconductor is converting from a 200- to a 300-mm fab. IMHO the financial community is somewhat naive if they believe they can convert a 200mm fab to 300mm "on the fly"; Micron was conservative with respect to Capex and they are taking a beating for being conservative while Taiwan DRAM makers were very aggressive and Micron was conservative - perhpaps Micron paid too much attention to the financial community who predicted 12 months ago DRAM next leg down - however things changed quite a bit over the last 6 months with respect to DRAM demand. Note this demand was not even expected by financial community - nevertheless the financial Monday AM quarterbacks come now out of the closet. "In comparison, foreign competitors have a lower proportion of output from 12-inch facilities: Samsung Electronics has 50%, Hynix Semiconductor 26%, Elpida Memory 76%, Qimonda 56%, and Micron Technology 31%, the sources pointed out." . Rick Hill pointed out there is not really an upgrade path for 200mm fabs - to me it looks as Micron is taking a hit for being conservative. I don't believe it's execution issue per se but they are late in moving to 300mm - on the other hand if they can transfer their 6F2 to 300mm they once again will obtain cost advantage relative to other DRAM players. Printer friendly Related stories Comments Email to a friend Latest news Hans Wu, Taipei; Rodney Chan, DigiTimes.com [Thursday 5 October 2006] Taiwan DRAM makers are outflanking their foreign competitors in terms of output from 12-inch fabs, with some of the major local DRAM makers obtaining 80% or more of their output from 12-inch facilities, according to industry sources. Powerchip Semiconductor Corporation (PSC), which has three 12-inch fabs and is planning to build more, obtains 80% of its current output from its 12-inch facilities, the sources indicated. ProMOS Technologies currently operates two 12-inch fabs, which also account for 80% of the company's current output. ProMOS is now building a third 12-inch fab. While Inotera Memories has all of its production from 12-inch facilities, Nanya Technology, which lacks a 12-inch capability, has decided to build its first 12-inch fab, with a pilot run expected to start in the third quarter of 2007, the sources indicated. The Taiwan DRAM makers' aggressive expansion of their 12-inch facilities is expected to help them cut costs and improve revenues and profits, the sources commented, adding that production costs at a 12-inch fab are 20-30% lower than at an 8-inch fab. In comparison, foreign competitors have a lower proportion of output from 12-inch facilities: Samsung Electronics has 50%, Hynix Semiconductor 26%, Elpida Memory 76%, Qimonda 56%, and Micron Technology 31%, the sources pointed out.