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Technology Stocks : Etec Systems moving up -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (730)	1/7/1998 11:26:00 AM
From: Paul Dieterich	Respond to of 1279

Upgrade to .25 takes cap equip precidence: Capital equipment spending remains a big question in 1998 A service of Semiconductor Business News, CMP Media Inc. Story posted at 7:30 a.m. EST/4:30 a.m. PST, 1/7/98 By J. Robert Lineback PEBBLE BEACH, Calif.--Suppliers of semiconductor production equipment and materials appear to be bracing themselves for slow growth in 1998 while the chip industry attempts to sort out the impact of Asia's economic woes. An informal poll of executives attending the Industry Strategy Symposium here this week showed most were now expecting a flat year. But industry analysts presenting new forecasts at the annual meeting varied greatly in their outlooks for 1998. For example, Dataquest analyst Clark J. Fuhs predicted wafer fab equipment spending will increase only 1.8% to $22.7 billion in 1998 compared to $22.3 billion in 1997, when the capital equipment market grew 2.9%. In contrast, Dan Hutcheson of VLSI Research Inc. painted a highly optimistic picture, forecasting a 24.7% increase in wafer fab equipment purchases in the next 12 months. Hutcheson expects wafer fab equipment spending to reach $26.9 billion in 1998, compared to $21.6 billion in 1997. "The data indicates we are in an upturn cycle," insisted Hutcheson, who believes pressures are increasing on chip makers worldwide to complete the migration to quarter-micron processes in 1998. Meanwhile, Dataquest's Fuhs maintained that stronger-than-expected demand for chip production systems in 1997 "stole" growth from 1998. In addition, weak demand for new wafer fabs in the Far East will also depress capital spending this year, according to Fuhs, who sees a 15.4% decrease in Asian revenues for equipment suppliers in 1998. "I'm not bearish on Asia. They will continue to spend money [on new fab capacity], but the issue is when," Fuhs said. "Will it take six to nine months? We think it will, and Asia will come back spending more money on capacity in 1999-2000." In South Korea, new capital spending has essentially been "frozen" and when it does restart, European projects will be given first priority, Fuhs said. Phase II expansions in the United States will most likely receive funding in 1999 after a delay, he added. In 1998, Korean capital spending will be cut 40%, based on U.S. dollar sales, Fuhs suggested. In 1999, Asian spending on wafer fab equipment will rebound with a 14.1% increase to $6.7 billion, Fuhs said. In 2000, the region will increase it capital spending on new fab capacity by 61.2% to $10.8 billion, according to the new Dataquest forecast.