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Technology Stocks : Novellus -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (1585)	7/30/1998 11:15:00 PM
From: Steve Fancy	Respond to of 3813

(UPDATE) Applied Materials Chief Sees Rebound In Semiconductor Demand In 1999 Dow Jones Online News, Thursday, July 30, 1998 at 18:06 SAN FRANCISCO -(Dow Jones)- Applied Materials Inc. Chief Executive James C. Morgan said Thursday he sees supply and demand coming into balance next year in the market for dynamic random-access memory, or DRAM, chips. Reaching this balance will push the industry to begin adding capacity again, Morgan said at the BancAmerica Robertson Stephens Semiconductor Conference here. For almost two years, the industry has had excess capacity, and that has pushed up inventories and pushed down prices. The effect on companies such as Applied Materials, a supplier of equipment for making semiconductors, has been slower product orders. Morgan said the expected business from DRAM companies will be one of several dynamics to drive growth at equipment companies. Other drivers will be stabilization in Asia and the expansion of the Internet, which will increase the demand for chips over the next couple of years. Meanwhile, the chief executive of Advanced Micro Devices Inc. (AMD) gave an optimistic outlook for the rest of the year. William "Jerry" Sanders told investors that he hopes to extend his company's market-share gains against Intel Corp. (INTC). Intel and AMD are aggressively cutting prices on chips, even as microprocessor clock speeds rise. By consistently undercutting Intel's prices, AMD has made market-share gains in the fast-growing sub-$1,000 PC category. Sanders said preliminary market share numbers had AMD with almost 35% of the desktop PC market in June, and almost half the market for sub-$1,000 PC sales in that month. Meanwhile, Rambus Inc. (RMBS) sees its technology capturing the Intel personal-computer market over the next few years, said chief executive Geoff Tate. In 1999, Rambus's high-speed memory technology will be in high-end PCs running Intel chips, Tate said. By 2001, all Intel chip sets will use Rambus technology, which accelerates the speed data is transferred between memory chips and processors, he said. Some industry projections show Rambus technology having 50% share of the DRAM market by 2001, up from 1% today, the company said. Earlier this month, it was reported that global chip sales plummeted 12.7% in May as sales fell in all major markets due to the lingering effects of the Asian financial crisis, according to a monthly report by the Semiconductor Industry Association. The report is consistent with the group's forecast of a 1.8% decrease in total chip revenue by year's end. chips for some multiprocessor applications by several weeks. The No. 1 chip maker, Intel, has been battered by an unexpected buildup of chip inventory at big PC makers, a slowdown in Asia and renewed competition at the low end that is exacerbated by growing demand for PCs that cost less than $1,000. In another negative sign, retail unit sales of computers in May grew just 0.7% from the year-earlier period, according to a survey of U.S. stores by ZD Market Intelligence, a market-research firm in La Jolla, Calif. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: robert b furman who wrote (1585)	7/30/1998 11:23:00 PM
From: Steve Fancy	Respond to of 3813

Novellus To Cut More Jobs Than Expected As Part Of Restructuring Dow Jones Online News, Thursday, July 30, 1998 at 19:48 SAN JOSE, Calif. -(Dow Jones)- Novellus Systems Inc. said late Thursday it plans to cut about 20% of its work force - twice as many jobs as it had previously indicated - and said it will also take a $5 million charge in the third quarter related to cost-reduction measures. Novellus (NVLS) makes automated wafer fabrication systems for the semiconductor manufacturing industry. The company, which made its announcement after the close of the U.S. stock market, had said in June it would cut it work force by 10%. The moves are intended to lessen the effect of reduced capital spending by semiconductor manufacturers. In a 10-K filing in March, Novellus said it had 1,776 employees. A First Call estimate of 16 analysts put the company's third quarter earnings at 13 cents a share. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: robert b furman who wrote (1585)	7/31/1998 3:19:00 PM
From: Todd D. Wiener	Read Replies (1) \| Respond to of 3813

KLIC is not in the front end, it's in the back end, just like COHU and TER. The back end companies may see a recovery shortly before the front end companies, like NVLS and AMAT. But KLIC doesn't see a recovery for several quarters, even though the bottom may be here. This downturn's resolution will probably consist of a long bottoming (several quarters) period, rather than a neat "V" shaped bottom. Historically, equip stocks bottom in the month or so prior to increasing order trends. This seems to be nearly a year off by most accounts. I haven't any idea when the equip stocks will reflect the actual business conditions, but I do know that today's prices (especially in NVLS) are gifts to current shareholders. The next major event will be AMAT's report in 2 weeks. That will move the market in some direction. BTW, Robertson Stephens just cut NVLS numbers from $1.65 to $1.31 in 1998, and $2,00 to $1.40 in 1999. Maintains LTA. Estimates for $.10 in Q3, $.15 in Q4, $.17 in Q1, and 50% sequential growth from Q1 to Q2 to Q3 to Q4. I think this is a tad optimistic, so I'd expect to see estimates for 1999 trend closer to $1.00. Either way, NVLS is getting more expensive. Good luck to all. Todd