ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Chip equipment stocks join selloff after Samsung forecast, KLA's earnings

Jan 24 2014

Chip equipment stocks aren't getting spared from a general market selloff after Samsung (SSNLF - the world's #2 chipmaker) guided for its 2014 chip capex to be flat Y/Y. AMAT -1.6%. LRCX -3.7%. ASML -0.7%. UTEK -2.2%. RTEC -3.2%. MTSN -5.1%.

Industry analyst Robert Marie observes this is the first time since 2009 that Samsung hasn't upped its chip capex budget. With Intel and TSMC (the industry's two other big clients) also guiding for capex to be flat (if not down) this year, Marie is cautious about 2014 growth, even though others have forecast sales will rebound sharply this year following a rough 2013.

KLA-Tencor (KLAC -2.2%) is joining the selloff even though the company posted an FQ2 EPS beat yesterday afternoon, and provided healthy FQ3 guidance - revenue of $790M-$850M and EPS of $1-$1.20 vs. a consensus of $814.5M and $1.11 - on its CC (transcript). KLA also forecast FQ3 bookings will be in a range of $700M-$800M (implies 10% Q/Q growth at the midpoint), and struck an upbeat tone about 2014 investments in 20nm and 3D NAND flash capacity.

KLA still expects 10%+ industry growth this year, but admits its outlook is "slightly weaker" than it was three months ago. The company also believes industry adoption of EUV lithography (important for ASML) has generally been pushed out to the 7nm process node from the 10nm node.

http://seekingalpha.com/news/1525701-chi...c_readmore

(vested)

IC Foundry Business Continues Impressive Growth

Total IC foundry sales increased 14% in 2013; Pure-play foundry sales surged 16%

JANUARY 22, 2014, By IC Insights

..................................In 2014, IC Insights forecasts the pure-play foundry market will grow 14% to $41.2 billion and once again significantly outperform the total IC market, which is forecast to increase 7%. IDM foundry sales are forecast to grow 3% to $6.8 billion this year. On an annual basis, IC Insights anticipates continued revenue growth in the pure-play foundry market throughout the forecast period rising to $64.6 billion in 2018, which amounts to a compound annual growth rate (CAGR) of 12% from 2013-2018, twice the expected 6% CAGR of the total IC industry, according to the 2014 McClean Report.............................................

http://www.icinsights.com/data/articles/...ts/634.pdf

(vested)

Worldwide Smartphone Shipments Top One Billion Units for the First Time, According to IDC

27 Jan 2014

FRAMINGHAM, Mass. January 27, 2014 – The worldwide smartphone market reached yet another milestone, having shipped one billion units in a single year for the first time. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 1,004.2 million smartphones worldwide, up 38.4% from the 725.3 million units in 2012. This aligns with IDC's most recent forecast of 1,010.4 million units, making for a difference of less than 1%. Smartphones accounted for 55.1% of all mobile phone shipments in 2013, up from the 41.7% of all mobile phone shipments in 2012. In the fourth quarter of 2013 (4Q13), vendors shipped a total of 284.4 million smartphones worldwide, up 24.2% from the 229.0 million units shipped in 4Q12.............................................

http://www.idc.com/getdoc.jsp?containerId=prUS24645514

__________________________________________________________________________________________________________________________________________________

Top 13 Foundries Account for 91% of Total Foundry Sales in 2013
TSMC, five other foundries with more than $1.0 billion in revenue.

JANUARY 28, 2014

IC Insights’ ranking of the leading IC foundries—both pure-play and IDM—by foundry sales for 2013 is shown in Figure 1. In total, the top 13 foundries in the figure represented 91% of total foundry sales in 2013. For comparison, the leading 13 foundries accounted for 84% of total foundry marketshare in 2009..........................................................

With the barriers to entry (e.g., fab costs, access to leading edge technology, etc.) into the foundry business being so high and rising, IC Insights expects the “top 13” marketshare figure to continue to slowly rise in the future............................................

http://www.icinsights.com/data/articles/...ts/640.pdf
____________________________________________________________________________________________________________________________________________________

Faltering 450mm?

27th January 2014

The drive towards 450mm is not as unified as it was because the motivations of the three main protagonists have altered.

Back in the summer of 2012, Intel, Samsung and TSMC invested in ASML to fund the development of 450mm.

Samsung bought a 3% stake in ASML for €503 million with a commitment to put up €276m for ASML’s R&D programmes.

Intel paid $3 billion for a 15% stake in ASML and said it would put another $1 billion into the R&D projects.

Take the Electronics Weekly Salary Survey 2014 »

TSMC paid €838 million for a 5% stake in ASML and another €276 million for the R&D projects.

Intel also paid money to Nikon for Nikon to develop a 450mm litho machine.

Then, before Christmas, ASML’s Paul van Gerven wrote on Bits&Chips that ASML’s effort to develop 450mm has been ‘reduced’.

van Gerven said that Samsung, TSMC and Intel have not pulled out of funding 450mm but he speculated that the programme has slowed because of an intervention by them.

The intervention could be a result of a disagreement by the three companies, because van Gerven said that although the goal of having a machine by 2015/16 for production in 2018 is achievable so far as ASML is concerned – nonetheless it will be delayed unless the three backers green light it........................

http://www.electronicsweekly.com/news/bu...6ygIj.dpuf

(Vested)

2014 Capital Spending Up in Korea; SEMIcon Korea 2014 to Address Mobile Innovation

SAN JOSE, Calif. — January 30, 2014 — With Korea expected to be the second largest region for fab construction spending in 2014, industry leaders will convene at SEMIcon Korea 2014 in Seoul on February 12-14 to discuss the latest trends and technologies shaping the future of microelectronics manufacturing. Fab construction spending is expected to grow from about US$ 1.1billion in 2013 to $1.4 to 1.8 billion in 2014. The 27th annual SEMIcon Korea, the leading semiconductor technology event serving the region, will be held at COEX in Seoul. The event opens with a keynote speech by Dr. Roawen Chen from Qualcomm on “Mobile Innovation: Leading the Semiconductor Industry to a Smart, Connected World.”

Driven by demand for mobile products, capital spending in Korea for fab equipment is forecast to increase from about $5.5 billion in 2013 to $6.5 to $7.5 billion in 2014, according to the SEMI World Fab Forecast database. Leading the investment activity in 2014, Samsung and Hynix will lead the investment activity in 2014. They are expected to increase their spending on construction and equipment for Front End fabs by a significant amount. Samsung — with its S3 Line (Line 17), 14nm FinFet pilot in S1 and new DRAM line in Line 16 — is expected to be one of the largest fab projects in Korea in 2014. For Hynix, spending is likely focused on M12, M10, and M11. Hynix also has plans for two new fabs in Icheon with an investment of at least 4 trillion Won (about US$3.8 billion). Groundbreaking of Phase 1 is expected in the first half of 2014 with chip production starting as early as 2015..................................................................

http://www.semi.org/en/node/48711?id=highlights

_________________________________________________________________________________________________________________________________________________

Is graphene a real opportunity or just hype?

January 31, 2014 // Paul Buckley

Despite being a substance attracting a high level of excitement from researchers in a broad spectrum of the electronics industry, market intelligence analyst Yole Développement is only predicting that the graphene materials market will be worth $141 million in 2024...........................

http://www.electronics-eetimes.com/en/is...9856&vID=8

(Vested)

How is this relevant to UMS?

does AMAT have production or R&D in KOrea?

(01-02-2014, 11:52 AM)Boon Wrote: [ -> ]2014 Capital Spending Up in Korea; SEMIcon Korea 2014 to Address Mobile Innovation

SAN JOSE, Calif. — January 30, 2014 — With Korea expected to be the second largest region for fab construction spending in 2014, industry leaders will convene at SEMIcon Korea 2014 in Seoul on February 12-14 to discuss the latest trends and technologies shaping the future of microelectronics manufacturing. Fab construction spending is expected to grow from about US$ 1.1billion in 2013 to $1.4 to 1.8 billion in 2014. The 27th annual SEMIcon Korea, the leading semiconductor technology event serving the region, will be held at COEX in Seoul. The event opens with a keynote speech by Dr. Roawen Chen from Qualcomm on “Mobile Innovation: Leading the Semiconductor Industry to a Smart, Connected World.”

Driven by demand for mobile products, capital spending in Korea for fab equipment is forecast to increase from about $5.5 billion in 2013 to $6.5 to $7.5 billion in 2014, according to the SEMI World Fab Forecast database. Leading the investment activity in 2014, Samsung and Hynix will lead the investment activity in 2014. They are expected to increase their spending on construction and equipment for Front End fabs by a significant amount. Samsung — with its S3 Line (Line 17), 14nm FinFet pilot in S1 and new DRAM line in Line 16 — is expected to be one of the largest fab projects in Korea in 2014. For Hynix, spending is likely focused on M12, M10, and M11. Hynix also has plans for two new fabs in Icheon with an investment of at least 4 trillion Won (about US$3.8 billion). Groundbreaking of Phase 1 is expected in the first half of 2014 with chip production starting as early as 2015..................................................................

http://www.semi.org/en/node/48711?id=highlights

_________________________________________________________________________________________________________________________________________________

Is graphene a real opportunity or just hype?

January 31, 2014 // Paul Buckley

Despite being a substance attracting a high level of excitement from researchers in a broad spectrum of the electronics industry, market intelligence analyst Yole Développement is only predicting that the graphene materials market will be worth $141 million in 2024...........................

http://www.electronics-eetimes.com/en/is...9856&vID=8

(Vested)

Semiconductor Industry Posts Record Sales in 2013

Global sales increase 4.8 percent in 2013, reaching highest-ever total of $305.6 billion; sales in Americas increase 13.1 percent

Published Monday, February 3, 2014 6:00 am
by Dan Rosso

WASHINGTON—Feb. 3, 2014—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that worldwide semiconductor sales for 2013 reached $305.6 billion, the industry’s highest-ever annual total and an increase of 4.8 percent from the 2012 total of $291.6 billion. Global sales for the month of December 2013 reached $26.6 billion, marking the strongest December on record, while December sales in the Americas increased 17.3 percent year-over-year. Fourth quarter global sales of $79.9 billion were 7.7 percent higher than the total of $74.2 billion from the fourth quarter of 2012. Total sales for the year narrowly exceeded expectations from the World Semiconductor Trade Statistics (WSTS) organization’s industry forecast. All monthly sales numbers are compiled by WSTS and represent a three-month moving average.

“The global semiconductor industry exceeded $300 billion in sales for the first time ever in 2013, spurred by consistent, steady growth across nearly all regions and product categories,” said Brian Toohey, president and CEO, Semiconductor Industry Association. “The industry finished the year on a strong note with its best December on record, indicating that recent momentum is likely to carry over into 2014.”

The industry saw strong demand in several product segments during 2013. Logic was the largest semiconductor category by sales, reaching $85.9 billion in 2013, a 5.2 percent increase compared to 2012. Memory at $67.0 billion and MOS micro-ICs at $58.7 billion rounded out the top three segments in terms of sales revenue. Memory was the fastest growing segment, increasing 17.6 percent in 2013. Within memory, DRAM performed particularly well, increasing by 33.3 percent year-over-year, while NAND flash experienced strong growth of 8.1 percent. Other positively performing product segments include optoelectronic products, which reached $27.6 billion in sales (5.3 percent annual increase) and analog, which reached $40.1 billion in sales (2.1 percent annual increase).

Regionally, the Americas market continued to show signs of strength, increasing annual sales by 13.1 percent in 2013. Annual sales also increased in Asia Pacific (7.0 percent) and Europe (5.2 percent), but fell sharply in Japan (-15.2 percent) in part due to the devaluation of the Japanese yen. Sales trend lines for Europe and Japan are pointed in the right direction, perhaps indicating that 2014 could be a stronger year for both regions. Although semiconductor sales in Q3 are often stronger than Q4, sales in the Americas grew by 4.5 percent in Q4, defying seasonal trends.

“The U.S. semiconductor market grew nearly three times faster than the global semiconductor market, despite lingering macroeconomic headwinds,” continued Toohey. “Policymakers can help maintain and expand this growth by enacting policies that promote innovation and open markets. President Obama expressed support for several pro-growth policies – including basic research funding, immigration reform, and meaningful trade agreements – during his State of the Union Address last week. For the Administration and Congress, now is the time for action on these critical policy priorities.”
http://www.semiconductors.org/news/2014/...s_in_2013/

December 2013 chart and graph
http://www.semiconductors.org/clientuplo...elease.pdf

(Vested)

Applied Materials 1Q2014 result (ending 26 January 2014) has just been released.

"In our first fiscal quarter, Applied Materials delivered earnings near the high end of our guidance range, while demonstrating momentum in revenue, orders and market share," said Gary Dickerson, Chief Executive Officer.

SSG : Revenue (USD million):
1Q2013 = 969
2Q2013 = 1,291
3Q2013 = 1,272
4Q2013 = 1,243
1Q2014 = 1,484 ( 19% higher than 4Q2013)

SSG : New Orders (USD million)
1Q2013 = 1,363
2Q2013 = 1,551
3Q2013 = 1,203
4Q2013 = 1,390
1Q2014 = 1,569 ( 13% higher than 4Q2013

SSG : Backlog (USD million)
1Q2013 = 1,071
2Q2013 = 1,265
3Q2013 = 1,173
4Q2013 = 1,320
1Q2014 = 1,366 ( 3% higher than 4Q2013)

(Vested)

Applied Materials' CEO Discusses F1Q 2014 Results - Earnings Call Transcript

http://seekingalpha.com/article/2016881-...art=single

Some observations which I find interesting – could be positive for UMS-

1) In first quarter, AMAT generated record orders in Taiwan. In addition, AMAT recorded its highest ever quarterly net sales in FE, second highest shipments of medium implant tools and its highest quarterly PVD orders in a decade. ( Comment: Highest quarterly PVD orders could mean highest orders for Endura )

2) AMAT is seeing BROADENING of CapEx spending in 2014 – seeing incremental buying from other (non-top-three) customers.

3) It looks like major technology trends that are playing to AMAT’s strengths in precision materials engineering, with FinFET and 3D-NAND, AMAT expects to see more EPI, more PVD, and many new materials ( Comment : more PVD could mean more demand for Endura )

(Vested)

Results probably out at the end of the month. Outlook is looking good though as the past few years has shown, it can be seasonal. Just collect dividends and enjoy the cash-flow meanwhile.

(Vested)

Semiconductor Unit Shipments To Exceed One Trillion Devices in 2016 Demand marches on; shipments in excess of one trillion units to be new “normal.”

FEBRUARY 18, 2014
By IC INSIGHTS

http://www.icinsights.com/data/articles/...ts/648.pdf

___________________________________________________________________________________________________________________________________________________
TSMC 2Q14 sales to rise 15-20%, says report

EDN; Jessie Shen, DIGITIMES [Monday 17 February 2014]

http://www.digitimes.com/news/a20140217PB200.html

__________________________________________________________________________________________________________________________________________________

GlobalFoundries turns up the tech
[The Post-Star, Glens Falls, N.Y. :: ]

http://www.tmcnet.com/usubmit/2014/02/17/7680765.htm

(vested)