SAN JOSE, Calif. A slew of vendors are getting a jump on next week's Semicon Japan trade show by rolling out new products, but the mood at the event is expected to be gloomy.
This week, Applied, Axcelis, Lam, Nikon, TEL and others rolled out products in preparation for the event, which is located in Chiba from Dec. 5-7.
Despite the expected hype at the event, the fab-tool industry remains sluggish right now. And the outlook is even worse heading into 2008.
"We expect the overall front-end equipment bookings to decline in 1H '08, and not to bottom until mid to late summer, with 3Q '08 being the earliest time for front-end bookings to show some marginal improvement," said Mehdi Hosseini, an analyst with Friedman Billings Ramsey & Co. Inc. (FBR), in a report.
"With an expected continued DRAM price erosion into 1Q '08 (declining to well below the cash cost), we believe DRAM players will face more-than-expected margin/cash flow pressures, which are finally expected to force non-Korean DRAM manufacturers to cut CY08 capex by 30-percent-plus, exceeding our prior
expectations of 20 percent, leading to an overall capex decline of 6 percent, versus prior expectations of down 3 percent," he said.
It's not all doom-and-gloom. During its mid-quarter forecast this week, Novellus Systems Inc. reaffirmed its outlook. Bookings were originally forecasted at up 5-to-15 percent. Novellus (San Jose) is trending closer to the high end of the range. Revenues will range from $355 million to $365 million and are also trending towards the middle of the guidance.
"I think that in general, everyone is very cautious about next year. People are concerned about macroeconomics which may affect a potential recession in the U.S.," said Rick Hill, chairman and CEO of Novellus, during a conference call. The transcript of the call was released by the Seeking Alpha Web site.
He was also cautious about the fab-tool industry. "We still see, if we look at the underlying unit demand it's going up; given utilization rates that would indicate to us a need to increase capex. We think it will be modest. We said before we anticipated flat to potentially up 5 percent. That would be what we would think as the best case scenario," he said during the call.