Wednesday, August 03, 2011

More Capital Spending Revisions: Tokyo Electron

Similar to what we’ve heard from Lam Research, Novellus, Teradyne and others in the semiconductor capital equipment sector, Tokyo Electron has revised their numbers for semiconductor equipment capital spending to -10 percent for the year.

From the release:

“In addition to uncertainty of global economy, demand for consumer electronics such as smartphones and tablets is slowing down compared to our initial expectations at the beginning of the year. Hence the semiconductor price is falling and fab capacity utilization is declining, we expect it to take some time for the SPE market to recover.

With these trends, we are currently assuming that the scale of SPE capex this fiscal year will decline by around 10% in contrast to our initial expectation of a 10% increase.

As we enter 2012, we expect a number of factors to stimulate chip demand including Windows8, further evolution of new mobile devices such as iPhone5 and new tablets, as well as the 2012 Olympics and the US presidential election."

More detail can be found in the Management presentation here:

The bad news about capital-spending is piling up and the stocks remain under pressure. The Applied Materials report will be the icing on the cake. After that, investors should be looking for the bottom in share prices.

Don't touch that dial!

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