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Lam Research defies slowing tool market trend

Posted: 10 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Lam Research Corp.? IC-equipment industry?

The earnings season starts this week for the IC-equipment industry and there are still mixed signals in the marketplace.

"Based on customer channel checks from various segments, we expect some slowdown in industry orders over the next 2-to-3 quarters, but at this point, we do not expect the slowdown to be a severe one," said Avinash Kant, an analyst with Canaccord Adams Inc., an investment banking firm.

Some companies, however, are doing better than others. Lam Research Corp. continues to be one of the few shining stars in the capital equipment market.

"While Lam Research will likely continue to outperform the industry due to its share gains and high exposure to memory, we expect other players to guide a sequential decline in orders for the December quarter," Kant said in a report issued last week (October 5).

Lam is expected to exceed Wall Street's forecast for the September quarter. "During its June quarter conference call, Lam had guided for September orders to be up 5-10 percent quarter-over-quarter," he said. "We believe September orders may come out slightly better than the top end of the guidance." Kant expects $1.05 per share in the quarter, compared to Wall Street's estimates of $1.02.

The company also projected an order slowdown in the December quarter. "Our current channel checks indicate that, based on continued strength from memory customers (especially in Taiwan), December orders for Lam may turn out to be more or less flat," he said.

"While orders have been driven by NAND flash recently, we expect DRAM orders to drive business over the next two quarters," he said. "Our checks indicate that key Taiwanese foundries are still not placing significant equipment orders but they are expected to resume ordering in the [Q2 2007] timeframe."

- Mark LaPedus
EE Times




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