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Nikon stays optimistic amid losses

Posted: 25 Jun 2010 ?? ?Print Version ?Bookmark and Share

Keywords:Nikon rehab plan? lithography? extreme ultraviolet? fab tool?

A monopolyand weakened Nikonwould be problematic in the sector. Tool prices, which are already high, would soar out of controlif ASML were to gain a monopoly, observers said. ASML's latest 193nm scanner runs $45 millioneach.

The outlook for Nikon is improving, however. "We believe that the outlook for (Nikon's) S620 double patterning ArF immersion steppers, the key leading edge gear, is improving. We understand that Nikon is gaining traction with three of the four major chipmakers where its market share is low or zero, while it concedes some dominant market share to rival ASML at its large U.S.-based client," Rubenstein said in the report. That customer is reportedly Intel.

"In addition, the fourth major customer, a foundry, appears to be showing interest in Nikon's new tool," he said. "Nikon's current forecast of 48 units for IC steppers is too low in our view, as order trend is better than expected. We gather that both memory and foundry orders are strong with pull-ins prevalent. Lead time is six months or over, and thus much of the high level of orders this year should spill over to the 1H of FY3/12."

LCD stepper orders are robust. "We gathered that the order trend in LCD steppers is also strong and over plan. Nikon's market share is highest at 7G to 8G at 65 percent, which allows for higher profit margins than the IC stepper business," he said.

"LCD stepper sales might peak later than IC steppers due to delays in China if the government does not approve applications from Samsung, LG, AUO, Sharp, etc. This is a risk factor for the LCD stepper business, but could also lengthen the current cycle if delays are imposed on construction projects," he said.

Nikon is strong in another segment. "We gather that all camera products are strong and over plan, thanks to China, the Americas, and Japan. We believe that China unit sales are up over 30 percent y-on-y in Q1 (April, May), while North America and Japan are (up) 10-20 percent," he said.

The threat of "mirrorless" cameras appears to be muted. "SLR mirrorless cameras at Panasonic, Olympus and Sony have been a large hit product in Japan, but we understand that there is almost no activity overseas," he said.

"Japan is only 12 percent of the total worldwide SLR market. We estimate that 20 percent of domestic SLR sales currently are mirrorless cameras, and thus 2-3 percent of global SLR sales are mirrorless cameras," he said.

"Nikon hinted last week in its mid-term explanatory meeting that it was working on a new type of SLR camera. We believe that Nikon will introduce its own hybrid-type SLR in CY2011, which would compete with mirrorless SLRs, but still utilize its profitable replacement lenses," he said. "Nikon's projection for FY3/13 SLR camera total market is 19 million units, higher than our previous projections. FY3/11 is higher than expected (13-14 million versus previous 12 million assumption), and thus its assumptions for FY3/12-FY3/13 have been adjusted upwards."

- Mark LaPedus
EE Times

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