Headline: BancBoston Robertson Stephens Points to Compelling Buying
Opportunities in the Semiconductor Equipment Industry
· Reiterates Strong Buy Rating on Unduly Pressured TER -
SAN FRANCISCO, April 29 /PRNewswire/ -- The following is being issued by BancBoston Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271:
BancBoston Robertson Stephens managing director and senior semiconductor equipment analyst Sue Billat today pointed to compelling buying opportunities in semiconductor equipment industry stocks. In the wake of pressure on the stocks, she reiterated her Strong Buy rating on Teradyne Inc. (NYSE:TER).
"Conventional wisdom has inextricably linked PC growth and DRAM pricing to the fortunes of the semiconductor capital equipment industry. However, we believe that there has been a significant shift in drivers that account for the recent strong growth in the equipment sector's bookings and that bode well for the future of the industry. The Internet and the communications industries, both wired and wireless, have become a crucial driver of expenditures for capital equipment. In addition, we note that sophisticated electronic games, such as Sony's Playstation, are contributing to the growth in demand," explains Billat.
Billat continued, "On the other hand, we expect that DRAM makers' proportion of equipment demand will only be approximately 25 percent of capital spending versus 45 to 50 percent during previous cycles. With regard to the PC market's decreasing importance in the equipment sector's health, we note that BancBoston Robertson Stephens estimates a healthy 13 percent unit growth of PC in the wake of the sub $500 per free PC. In our view, this growth level will require capacity buys as well as technology buys that ensue from the industry's move to 0.18 micron devices. Thus, we believe that determining the equipment sector's performance by tracking PC and DRAMs pricing is not only an oversimplification, but also highly misleading." "Specifically, Strong Buy-rated Teradyne has, in our view, come under undue pressure in the wake of softening DRAM prices. The company recently reported a stellar quarter, and we reiterate that, in our view, the company derives approximately 45 percent of its business from testers of devices commonly communications and networking applications. Moreover, we believe that the company is supplying the leading producers of wireless communication ICs directly as well as their chipmakers," said Billat. "Therefore, Teradyne's overall product mix of high speed logic, mixed signal and advanced memory positions the company exceptionally well, in our opinion, to leverage the growth drivers in of the semiconductor equipment industry."
Clients interested in receiving more information should contact their salesperson at 415-781-9700.
BancBoston Robertson Stephens is a leading international investment banking firm focused on emerging growth companies. The firm's 55 equity and high yield research analysts cover more than 600 companies. Additional information is available upon request.
The information contained herein is not a complete analysis of every material fact respecting any company, industry or security. Although opinions and estimates expressed herein reflect the current judgment of BancBoston Robertson Stephens, the information upon which such opinions and estimates are based is not necessarily updated on a regular basis; when it is, the date of the change in estimate will be noted. In addition, opinions and estimates are subject to change without notice. This Report contains forward-looking statements, which involve risks and uncertainties. Actual results may differ significantly from the results described in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in "Investment Risks." BancBoston Robertson Stephens from time to time performs corporate finance or other services for some companies described herein and may occasionally possess material, nonpublic information regarding such companies. This information is not used in the preparation of the opinions and estimates herein. While the information contained in this Report and the opinions contained herein are based on sources believed to be reliable, BancBoston Robertson Stephens has not independently verified the facts, assumptions and estimates contained in this Report. Accordingly, no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions contained in this Report. BancBoston Robertson Stephens, its managing directors, its affiliates, and/or its employees may have an interest in the securities of the issue(s) described and may make purchases or sales while this report is in circulation. BancBoston Robertson Stephens International Ltd. is regulated by the Securities and Futures Authority in the United Kingdom. This publication is not meant for private customers. The securities discussed herein are not FDIC insured, are not deposits or other obligations or guarantees of BankBoston N.A., and are subject to investment risk, including possible loss of any principal amount invested.
SOURCE BancBoston Robertson Stephens
· 0- 04/29/99
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