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Outlook better for IC equipment market, says investment banking firm

Posted: 13 Apr 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Mark LaPedus? IC equipment? Piper Jaffray?

The consensus on Wall Street is that the semiconductor-production equipment market looks gloomy for the second half of 2006, but investment banking firm, Piper Jaffray Inc., has not changed its overall capital spending forecast, which calls for 15 percent growth in 2006 over 2005.

According to the firm, in the Q2 and beyond, several large fab projects are in the works and could jumpstart the fab-tool sector in the second half. There are significant projects at Elpida, Hynix, Intel, Inotera, Samsung, STMicroelectronics, Toshiba and TSMC.

"We are expecting an uneventful earnings season for 1Q 2006 results, as 1Q 2006 results will likely be mostly in line; 2Q 2006 bookings guidance is shaping up to be about 5-10 percent higher than 1Q 2006, which is also in line with expectations," said C. William Lu, an analyst with Piper Jaffray.

"Over the past two months, Street expectation for 2H 2006 has declined significantly and we now believe that stocks are factoring in a decline of 3Q 2006 bookings sequentially," he said. "While this could play out, our checks indicate that some of the Japanese chip makers are getting incrementally more positive. Specifically, Toshiba, Sony, Fujitsu and Matsushita could all book in 2H 2006."

There are more positive signs. "If the foundries also come back with additional orders, we could see an improvement to the outlook," Lu said.

- Mark LaPedus
EE Times

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