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

To: Dr. Bob who wrote (20519)	6/17/1998 1:15:00 PM
From: Big Bucks	Respond to of 70976

Doc, I agree, good argument! BB

To: Dr. Bob who wrote (20519)	6/17/1998 2:43:00 PM
From: elbasha	Respond to of 70976

NORTH AMERICAN SEMICONDUCTOR CAPITAL EQUIPMENTBOOK-TO-BILL RATIO INCHES UP IN MAY June 17, 1998 SYMBOL(S): AMAT, KLIC, KLAC, NVLS, TGAL, PRIA, PLAB ANALYST(S): BILLAT, SUSAN RATING: BUY Download PDF Synopsis: The following synopsis is qualified in its entirety by the more detailed information contained in the full research report, including the discussion of certain risks associated with an investment in this security contained in "Investment Risks." - Overall ratio was 0.80, up from in 0.77 April - Modest improvement within the noise level - Outlook remains bearish at least through Q4:98 The semiconductor book-to-bill for North American-based semiconductor capital equipment companies ticked up in May to 0.80 from April's 0.77 (revised). Three-month average orders were up 4% and three-month average shipments were flat, resulting in modest sequential improvement in the book-to-bill ratio. Though encouraging on the surface, the strength in orders is, in our view, within the noise level and not indicative of near-term improvement in the industry. We believe that industry fundamentals may be stabilizing but are not likely to improve for another two to three quarters. Three-month average orders for front-end tools rose to $811 million in May, up 6% from $762 million in April, but reflecting strength that we do not believe is sustainable near term. Front-end shipments rose 1% to $987 million, resulting in a May front-end book-to-bill ratio of 0.82, up from 0.78 in the prior month. The outlook for the back-end continues to deteriorate, in our opinion, as orders declined 3% sequentially and shipments fell another 2% in May. The May book-to-bill dropped to 0.76 from 0.74 in April. We expect that the semiconductor capital equipment industry will continue to skip along the bottom for probably two to three more quarters. In our view, the incremental improvement in front-end orders is within the bounds of normal volatility and signals, at best, potential stabilization in a harsh industry climate. We believe that the recent spate of pre-announcements reaffirms our view of a difficult industry outlook and that signs of recovery remain elusive.