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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Denice who wrote (17900)	3/19/1998 6:13:00 PM
From: Teri Skogerboe	Read Replies (2) \| Respond to of 70976

Denice & All, Headline: Semiconductor Equipment: SEMI Book-to-Bill Indicates Continuing Softness Author: Edward C. White, Jr., CFA 1(212)526-4744/Tolomy Erpf Company: AMAT, KLIC, KLAC, NVLS, PRIA, ETEC, SFAM, SVGI, TER, LRCX, LTXX Country: ECO CUS Industry: SEMICO Today's Date : 03/18/98 * Semiconductor Equipment and Materials International, the trade association for the semiconductor equipment industry, publishes monthly (3-month moving average) shipment, order and book-to-bill statistics. * The book-to-bill ratio for the 3 months ended in February for all equipment in total was 0.92, down slightly from 0.93 in January. Total shipments and total orders were down 4% and 5%, respectively from January levels. * The front-end ratio was 0.89 in February, down from a revised 0.87 in January. This is the fifth sequential month during which growth in orders has been less than the growth in shipments. * The assembly & test ratio (equipment made by Kulicke & Soffa, Teradyne, Electroglas, LTX and others) declined to 0.98 in February from 1.09 in January. This sector has softened over the last two reporting periods. Highlights: The semiconductor equipment market continued to soften in February. Three-month average orders for February declined 5% from January levels and represent the third month of sequential decline in orders since November, 1997. The decline in the overall book-to-bill ratio was due to weak growth in orders in both the front end and the back end. Shipments also declined 4%, representing the second month of sequential declines. U.S. based semiconductor equipment manufacturers continue to experience weakness in equipment purchases by DRAM manufacturers and Asian chipmakers. Korean customers have cut back purchases dramatically due to lack of funding and Japanese customers are likely to trim their equipment purchases as much as 15-20% from 1997 levels in light of declining profit forecasts. Front end equipment orders and shipments in February declined 5% and 7%, respectively, versus declines in orders and shipments in January of 18% and 10% respectively. This represents the third month of sequential declines in both orders and shipments since November, 1997. Test & Assembly orders in February declined 6% from January levels, following a 6% decline in January. Shipments in February increased 4%, versus a decline of 4% in January. After experiencing tremendous growth in 1997, this sector has softened over the last two reporting periods. However, order levels are still 35% above those reported a year ago. We continue to recommend select companies in the semiconductor equipment sector which stand to benefit from technology buying of 0.25 micron equipment by chipmakers. The key beneficiaries of 0.25 micron technology: Applied Materials (AMAT, $33 5/16, Rated 1); KLA-Tencor (KLAC, $36 3/16, Rated 1); Etec Systems (ETEC, $55 13/16, Rated 1); SpeedFam (SFAM, $23 1/16, Rated 1); PRI Automation (PRIA, $25 25/32, Rated 1). Monthly (3-Month Average) Semiconductor Equipment Book-to-bill figures: Front-End Test Assembly Test & Assembly Total Mar 1.24 0.95 0.75 1.15 Apr 1.10 0.76 0.59 1.00 May 0.92 0.75 0.52 0.87 Jun 0.91 0.71 0.78 0.87 Jul 0.77 0.70 0.78 0.76 Aug 0.72 0.62 0.86 0.71 Sep 0.69 0.64 1.05 0.70 Oct 0.76 0.76 1.07 0.78 Nov 0.86 0.99 1.15 0.90 Dec 0.94 1.34 1.21 1.01 Jan'97 1.00 1.45 1.27 1.08 Feb 0.97 1.53 1.27 1.07 Mar 1.10 1.42 1.17 1.15 Apr 1.03 1.56 1.03 1.10 May 1.06 1.37 0.90 1.09 Jun 1.03 1.31 1.02 1.24 1.07 Jul 1.11 1.22 1.00 1.16 1.12 Aug 1.08 1.16 1.09 1.15 1.09 Sep 1.05 1.26 1.08 1.21 1.09 Oct 0.98 1.16 1.18 1.16 1.06 Nov 0.94 1.18 1.00 Dec 0.95 1.12 1.00 Jan'98 0.87 1.09 0.93 Feb 0.89 0.98 0.92 Total Orders ($Millions) Total Shipments ($Million) Aug 1101.0 1053.9 Sep 1132.3 1112.9 Oct 1209.2 1135.3 Nov 1294.8 1222.8 Dec 1499.2 1305.3 Jan'96 1606.6 1256.6 Feb 1686.5 1353.9 Mar 1447.0 1255.6 Apr 1360.5 1353.9 May 1186.7 1365.7 Jun 1175.1 1354.2 Jul 991.8 1310.8 Aug 882.7 1248.3 Sep 777.8 1118.7 Oct 832.9 1072.4 Nov 951.5 1062.3 Dec 1078.2 1069.2 Jan'97 1116.2 1034.2 Feb 1100.9 1029.0 Mar 1264.7 1101.6 Apr 1385.7 1260.5 May 1421.0 1300.0 Jun 1474.3 1374.6 Jul 1658.7 1475.8 Aug 1431.9 1341.6 Sep 1538.4 1458.2 Oct 1583.7 1549.8 Nov 1598.6 1597.7 Dec 1531.2 1536.2 Jan'98 1382.0 1465.1 Feb 1256.6 1373.3 ---------------------------------------------------------------------- Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities. ------------------