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

To: Return to Sender who wrote (58190)	11/18/2012 1:06:12 AM
From: Donald Wennerstrom	2 Recommendations Respond to of 95931

Nov 16, 2012 12:53 PM AAPL: AMAT’s Weak Outlook Points to Supply Uncertainty, Says Credit Suisse By Tiernan Ray The disappointing fiscal Q1 outlook from chip equipment maker Applied Materials (AMAT) yesterday afternoon has largely been chalked up to an overall tough global macroeconomic situation, but at least one analyst today was linking the matter to spending by Samsung Electronics (005930KS) and the outlook for one of its largest customers, Apple (AAPL). Credit Suisse equipment analyst Satya Kumar, who has a Neutral rating on Applied’s stock, today writes that much of the weakness in the outlook for Applied’s “Silicon Systems Group,” or SSG, going forward has to do with just how much Apple will build, and how that affects chip demand at Samsung: AMAT indicated that it expects that WFE to be down 5- 15% in 2013. The company expects foundry and logic spending to decline y/y while it expects memory to remain flat. The company now expects that foundries will add 70-100K WSPM on 28nm and 20k WSPM on 20nm, significantly below prior expectations of additions of 100-120K WSPM on 28nm and 50k WSPM on 20nm. We believe that the weaker foundry outlook is primarily driven by issues surrounding AAPL supply chain and expect that foundry outlook will improve once there is greater clarity around AAPL’s supply chain for next year’s smartphone builds. AMAT was also more cautious on logic and now expects logic spending to decline y/y due to weaker PC demand. AMAT expects memory spending to remain weak in F1H13 but expects NAND orders to recover in F2H13 […] We maintain our view that clarity on AAPL business should result in better outlook even from Samsung. Kumar does not go into further detail, but one question is whether Samsung’s uncertainty is about Apple’s rate of product build, or whether the matter is more that of Apple switching away from Samsung altogether, as Bernstein Research’s Mark Newman alluded to yesterday. blogs.barrons.com