SAN JOSE, Calif. - VLSI Research Inc. has slightly lowered its chip forecast for 2010, but raised it for 2011.
Translation for fab tool industry: Vendors will continue to party this year amid strong Q3 results, but the fun and games may be over in 2011.
In the new forecast from VLSI, the research firm projects that the IC market will jump by 32 percent in 2010 and will grow by 8 percent in 2011. In the previous forecast, the firm projected that the IC market would grow 33.7 percent in 2010 and 6.6 percent in 2011.
Its semiconductor equipment forecast remains constant. The fab tool market is projected to grow 103 percent in 2010 and 10.6 percent in 2011, according to the firm.
In other words, the market is expected to cool next year. In the meantime, there are warning signs. ''Chipmakers are still expanding at a fast clip but they’re becoming increasingly cautious as we approach the Christmas Blackhole,'' according to VLSI Research. ''Memory orders, in particular, have decelerated considerably in the last few months due to weakening DRAM fundamentals. DRAM supply is increasing at the time demand is slowing, resulting in oversupply. Consequently, ASPs are falling at a much greater rate than costs. This will impact the profitability of DRAM suppliers and their ability to expand.''
Still, the results among fab tool makers were strong. Lam Research Corp. announced financial results for the quarter ended Sept. 26, 2010. Revenue for the period was $805.9 million and net income was $193.7 million, or $1.55 per diluted share, compared to revenue of $695.3 million and net income of $140.0 million, or $1.10 per diluted share, for the June 2010 quarter.
Shipments for the September 2010 quarter were $808 million compared to $694 million during the June 2010 quarter.
Lam beat Wall Street's estimates. It was supposed to earn $1.37 on sales of $794.41 million.
Struggling Mattson Technology Inc. announced results for the third quarter ended Sept. 26, 2010. Net sales for the third quarter were $39.8 million, compared with $32.1 million in the second quarter. Net loss for the third quarter was $6.4 million, or $0.13 loss per share, compared with a net loss of $8.4 million, or $0.17 loss per share, for the second quarter.
Subsystems vendor MKS Instruments Inc. said sales and were $221.3 million in the quarter, up from $220.6 million in the second quarter of 2010, and an increase of 117 percent from $102.0 million in the third quarter of 2009. GAAP net income was $38.6 million, or $0.76 per diluted share, compared to net income of $38.8 million, or $0.76 per diluted shared in the second quarter of 2010, and a net loss of $4.0 million, or minus $0.08 per basic share in the third quarter of 2009.
MKS said that its fourth quarter sales may range from $215 to $230 million.
Another vendor, FSI International Inc., reported financial results for the fiscal 2010 fourth quarter and the fiscal year ended Aug. 28, 2010. Sales for the fiscal 2010 fourth quarter increased 103 percent to $28.8 million, as compared to $14.2 million for the same period of fiscal 2009. The company’s net income for the fourth quarter of fiscal 2010 was $6.6 million, or $0.17 per share, as compared to a net loss of $73,000, or $0.00 per share, in the fourth quarter of fiscal 2009.
''We are downgrading FSI to a 'Hold' after the company reported decent F4Q10 results but provided disappointing F1H11 guidance,'' said Edwin Mok, an analyst with Needham & Co. LLC, in a report. ''We are concerned that a slowdown of its core Zeta product sales will be faster than the revenue ramp of the single-wafer Orion tool, resulting in additional pockets of revenue weakness in the coming quarters. While we remain positive on FSI's ViPR technology and the potential of its single-wafer product, we recommend investors wait for more qualification confirmations and additional wins before getting back into the name.''
CyberOptics Corp. reported operating results for the third quarter of 2010 ended Sept. 30. Consolidated sales totaled $14.145 million, up 65 percent from $8.550 million in the third quarter of 2009. Net income came to $948,000 or $0.14 per diluted share, compared to the net loss of $841,000 or minus $0.12 per diluted share in the year-earlier period.