Tuesday, November 30, 2004

SEMI Consensus Forecast : Press Release Data

Data from the SEMI Member Consensus Forecast was delivered in a press release today. One part of the release is shown in the table below. This press release, from what I recall, is the first that SEMI has issued containing a breakout of the equipment market by segment. After you have a look at this table I'm sure you'll be asking yourself the same question I am right now: "If this forecast is accurate will it be good enough to move equipment company share prices higher?"
Forecast by Equipment Segment
Equipment Type 2003 Actual $B 2004 $B % Chng 2005 $B % Chng 2006 $B % Chng 2007 $B % Chng
Wafer Process $14.75 $23.93 62.24% $23.17 -3.18% $23.88 3.06% $27.34 14.49%
Assembly & Packaging 1.67 2.38 42.51% 2.04 -14.29% 2.26 10.64% 2.83 25.39%
Total Test 4.12 6.22 50.97% 5.64 -9.32% 5.61 -0.53% 6.32 12.66%
Other Front End 1.65 2.78 68.48% 2.64 -5.04% 2.77 4.92% 3.12 12.64%
Total Equipment* $22.19 $35.31 59.13% $33.49 -5.15% $34.52 3.07% $39.61 14.76%
Today I've been rounding up the recent Chart Watch data, which contains the most recent update from SEMI's SEMS data package. That series of charts Subscribers follow on a regular basis will be updated this evening.

Thursday, November 18, 2004

Why is the Market Rallying?

While I am still pecking away on company comments and some other items, I've been answering a few e-mails. People are asking, "Why are semiconductor related issues moving up?" The jump in prices, especially following the rather dismal Applied Materials earnings report (the stock is up $0.30 as I type this), is mainly what prompts the question. Of course, quarterly earnings are just snapshots of a particular moment and though they are heavily scrutinized by media, analysts and investors, they tell us little about the long term outlook. What are investors looking at? A few of the reports I've read have said that Q2 of next year will usher in another turning point. Some are talking about the end of '05. Perhaps the best explanation for today's rally, other than the one that suggests semiconductor and semiconductor equipment share prices are primarily driven by gaming theory, is one that was offered by SunTrust's Chief Investment Strategist, Gail Dudack: Between Cingular's cash purchase of AT&T Wireless for $41 billion and Microsoft's (MSFT-$27.12) special dividend ($32 billion) payable on December 2, there will be over $73 billion of cash coming to investors in November - December. This figure is significantly larger than any two months of equity mutual fund flows since February - March of 2000. The November through January period tends to be a good period for the market due to normal liquidity patterns. This year we see an extra boost. Meanwhile, there is less than $3 billion in IPO's pending by year end. In short, the current supply/demand backdrop for equities is excellent. This makes it all seem rather simple.... It's just supply and demand.

Wednesday, November 17, 2004

Applied Materials Reports.... Bookings Headed South

The much anticipated Applied Materials quarterly earnings report was released after the close of today's trading session. The earnings conference call is underway and I plan to have an update of this in the Model Portfolio comments to be delivered this evening. First impressions: Bookings for the next quarter are expected to be off 35% - that's quite a bit more than anticipated. Most of the reports I've read were expecting a 15% to 20% fall in bookings. Revenues are estimated to be down 20% to 23%. That's also larger than expected. More comments to be posted shortly......