SAN FRANCISCO—Wafer fab equipment spending is likely to decline in 2012 compared to 2011, but the magnitude of that decline appears a lot smaller than it did a few months ago, according to Martin Anstice, president and CEO of semiconductor equipment vendor Lam Research Corp.
Anstice, who took for Steve Newberry as Lam's CEO Jan. 1, told analysts on a conference call following Lam's quarterly earnings report Wednesday (Jan. 25) that Lam forecasts total wafer fab equipment spending industry-wide will be about $30 billion this year, down slightly from an estimated $31 billion to $32 billion in 2011. A few months ago, Anstice said, Lam was anticipating that wafer fab equipment spending would be down 5 to 20 percent this year.
Lam (Fremont, Calif.) reported steep declines in sales and profit for the quarter ended Dec. 25, but delivered revenue and guidance that beat analysts' expectations.
Anstice said Lam's improved outlook for 2012 stems from higher demand from foundries at the 28-nm node and higher than expected capital spending plans by Intel Corp. and Samsung Electronics Co. Ltd.
"We are cautiously more optimistic in our 2012 outlook than we were three months ago," Anstice said, adding that the unstable global macroeconomic environment continues to cloud the picture.
Anstice said he expects the first half of 2012 to be stronger than the second half for Lam, though he added that visibility in the second half of the year remains poor.
Earlier this month, Intel and Samsung said they planned to spend $12.5 billion and $12.2 billion, respectively, on semiconductor capital expenditures this year, more than industry observers were expecting. Together, the two companies are expected to account for about half of all semiconductor capex this year, according to market research firm IC Insights Inc.
Anstice noted continued strong demand for consumer electronics and the emergence of Ultrabooks—the low power notebook PC pushed by Intel that emerged as the hottest product category at the recent Consumer Electronics Show—should drive semiconductor revenue growth. But Anstice said he doesn't expect market penetration of Ultrabooks to grow significantly until price points come down later in the year.
Anstice said Lam expects both media tablet and smartphone unit growth of about 40 percent in 2012. But the company expects PC unit growth to be in the low single digits, he said.
Lam announced last year it plans to acquire Novellus Systems Corp. in a $3.3 bill stock deal expected to close in the first half of this year. Asked to describe customer reaction to the deal Wednesday, Anstice said, "I would say the feedback is very positive."
Lam reported sales of $584 million for the quarter ended Dec. 25, down 14 percent from the previous quarter and down 33 percent from the year-ago quarter. The company reported a net income for the quarter of $33.2 million, down 54 percent from the previous quarter and down 85 percent from the year-ago quarter.
Sales for the quarter beat consensus analysts' expectations, which called for revenue of about $573 million.
Shipments in the quarter amounted to $563 million, Lam said, down 3 percent from the previous quarter. Foundries accounted for 46 percent of Lam's shipments in the quarter, while memory vendors accounted for 42 percent, the company said.
For the current quarter, Lam said it expects revenue to be between $620 million and $660 million, which would amount to a sequential increase of 6 to 13 percent. The company said it expects shipments for the current quarter to be between $675 million and $725 million, up 20 to 24 percent sequentially.
Lam's sales target for the current quarter exceeded consensus analysts' expectations, which called for sales of about $607 million, according to Yahoo Finance.