Stifel Nicolaus’s chip equipment analyst Patrick Ho today offers his observations on the industry after three days of the trade show Semicon West in San Francisco.
In sum, he sees continues uncertainty for the moment, but a “quick bounceback” in equipment orders in the December quarter:
In our view, there is clearly a high level of uncertainty for 2H12. What appears to be consensus is a �pause� or �air pocket� in the September/October time quarter, led by push outs across several foundries (Taiwan Semiconductor Manufacturing (TSM), Samsung [Electronics�(005930KS), GlobalFoundries) and weakness in the memory market (particularly, NAND flash which has weakened much more than we thought). We would not be surprised to see orders decline 20-25% sequentially in September.
Ho, who has a Buy rating on Applied Materials (AMAT) shares, warns that the company has some work to do to restore its reputation:
We believe there are many new technology challenges ahead for the industry (FinFET, new materials, 3D device structures) and [President Gary Dickerson's] focus toward materials engineering and improved device performance and yield will be critical for Applied to regain the mantle of �technology leadership� that we believe has been lost over the past five to seven years. While we are very confident in his ability to turn around the company, we caution investors that this effort will take some time and will not occur overnight.
Applied shares today are up 14 cents, or 1.3%, at $10.51.
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