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ATE industry might slow down this year, warns Canaccord analyst

Posted: 11 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:automatic test equipment? Canaccord Adams? ATE? XX? XX?

After a brief upturn, the automatic test equipment (ATE) industry could experience a "pause" in the second half of 2006, warned an analyst.

Overall ATE spending has been judicious and controlled in current cycle, said Dennis Wassung, an analyst with Canaccord Adams Inc. in a new report.

"While customer spending on semi test solutions has been trending positively in recent quarters, our research indicates that the broader tone will likely be more cautious amid uncertainties in the industry outlook for the second half of 2006," he warned.

"Looking to the Q2 earnings season, we expect generally strong results, up sequentially from Q1, although expect to hear a more cautious tone regarding bookings expectations in the second half," he said. "We are not forecasting a sharp downturn in business in the second half, but believe the industry may take a pause from its recent string of growth quarters."

It's not all doom and gloom for ATE makers. "As we look for the best way to play the current environment, we point to the analog/mixed-signal segment of the IC industry, which remains on a robust growth path, and boasts a broad set of drivers going forward, including consumer electronics, wireless, and automotive, among others," he said.

In the light of this week's Semicon West trade show, there's good and bad news for the semiconductor equipment industry: Gartner Inc. raised its capital spending forecasts for 2006, but the firm also lowered the numbers into negative territory for 2007.

In the new forecast, Gartner also raised its forecast for front-end wafer fab equipment, but slightly lowered the projections for packaging gear and ATE.

- Mark LaPedus
EE Times

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