Full story
CEOs And Analysts See Signs of 1999 Recovery for Semiconductor
Equipment and Materials Industry
01:13 p.m Dec 01, 1998 Eastern
TOKYO--(BUSINESS WIRE)--Dec. 1, 1998--
SEMInvest Japan 98 Investors Conference Highlights
New Technologies Driving Future Investment Opportunities
Recovery of the global semiconductor equipment and materials industry will begin in
1999 according to financial analysts and industry executives who met here prior to the
annual SEMICON Japan exposition.
Opinions on the timing of the recovery ranged from the first quarter to the third quarter of
the year. It will be driven by a number of factors, including a return to a balance in supply
and demand in semiconductor devices, increased reliance on non-PC applications and
fundamental changes in the way chips are made.
The SEMInvest Japan 98 conference, organized by SEMI Japan, an industry association,
was the largest and most comprehensive investor event to date in Japan to focus solely
on semiconductor equipment and materials companies. More than 100 fund managers
and institutional investors attended.
"We are predicting that the semiconductor capital equipment industry will continue to
grow even faster than the semiconductor industry, at a compound annual growth rate of
20 - 25 percent. This is what has made it such an attractive industry for investors," said
Linda Strunk, senior capital equipment analyst for Warburg Dillon Read. "The high rate
of growth is a function of the increasing amount of value semiconductor equipment
manufacturers are providing for semiconductor makers."
While participants differed on the quarter in which the recovery will begin, most felt it will
occur in 1999. Noriko Oki, vice president of Morgan Stanley Japan Ltd., said, "We see
good prospects for the future, with 5-10 percent capital spending growth in 1999. The
outlook for technology driven equipment buys is much better than capacity-driven buys."
Other speakers at the conference emphasized that the industry will look different when
the recovery comes. The experts cited further consolidation, increased reliance on
technology partnerships, and selective purchases of advanced equipment to upgrade and
extend the life of existing wafer fab facilities as characteristics of the recovering industry.
In order to participate in the recovery, Japanese companies will have to develop a more
global point of view, according to Tetsuo Tsuneishi, executive vice president, Tokyo
Electron Limited. In particular, he said, they need to expand their presence in the U. S.
market. "We must completely change the shape of the industry and the corporations that
participate in it," he said.
Akira Minamikawa, senior analyst, component semiconductor research for IDC Japan,
said that in the coming recovery, personal computers will begin to lose their place as the
primary driver of semiconductor usage. Instead, he said, such applications as
automobiles, smart cards, communications and digital consumer products will consume
ever-larger quantities of circuits.
The investor conference was held in conjunction with SEMICON Japan, which draws
the largest attendance of any of semiconductor equipment, materials and services
exposition in the world, and is being held for the 22nd year. The exposition, produced by
Semiconductor Equipment and Materials International (SEMI), is being held December
2-4, 1998 at the Nippon Convention Center, Makuhari, Japan.
Based in Tokyo, Japan, SEMI Japan is the regional headquarters for Semiconductor
Equipment and Materials International, an global trade association serving more than
2,300 member companies participating in the $65 billion semiconductor and flat panel
display equipment and materials markets. SEMI maintains offices in Austin, Beijing,
Boston, Brussels, Hsinchu, Moscow, Mountain View, Seoul, Singapore, Tokyo and
Washington, D.C. Visit SEMI OnLine at www.semi.org. ASSOCIATION
CONTACTS Naoko Tani / SEMI Japan Ph: 81.3.3222.5755 Fx: 81.3.3222.5757
e-mail: ntani@semi.org SEMICON Japan Press Room Ph: 81.43.296.9016 Ph:
81.43.296.9017 Fx: 81.43.296.9042
Copyright 1998, Business Wire |
