Still digging through the stories from the last few weeks. With Lam Research reporting this evening it's worth reviewing what Applied Materials had to say at Semicon West. Lam, no doubt, will echo some of these sentiments.
Highlights:
- Eight new products
- Soft Industry Outlook in the Near Term
- Long term Applied is bullish (no surprise here)
- Over $100 million to be spent on 450mm development in 2012
- Reiterated that 450mm will happen. (This week I've been talking with several industry folks that work with Intel and they are saying the 450mm push is on - I'll come back to these discussions in another note)
- Foundries have fab shells ready but are in a lull. Applied did say they could come back quickly though. (My $0.02 - The foundries have not been spending much money- in fact, by some estimates foundry orders in the 2nd quarter 2011 were at their lowest level since the third quarter of 2007 and the 1st quarter of 2006 - this does exclude the horrific low made in 2009)
- DRAM companies are also reluctant to spend - noting weakness in the consumer PC market.
I've been expecting a year end bust-the-capital-spending-budget but given the questionable macroeconomic environment I'm beginning to wonder if that is going to happen. Granted, not everyone is holding back. Intel is still investing heavily - which is really not unusual because they typically invest counter-cyclically. Some folks are even going as far to suggest that Intel is on allocation.
Many of the reports and comments I have received are suggesting that the next upleg for capital spending will be pushed out in to the early months of next year. That's not that far away when you think about it. I say this because the stocks tend to start moving before the cycle kicks in. If the script plays out like it has in the past then it might be a good idea to put these on your radar screen. When confessionals are over - Applied reports in August - we might see some bargains out there.
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