Credit Suisse cuts estimates for chip-tools makers
KLA-Tencor and Varian downgraded on weakening demand
By Benjamin Pimentel, MarketWatch
Last update: 2:54 p.m. EDT Sept. 22, 2008SAN FRANCISCO (MarketWatch) -- Credit Suisse on Monday said it has trimmed earnings estimates for chip-equipment makers, citing weakening market demand, highlighted by the slump in memory products.
Credit Suisse analyst Satya Kumar also cut ratings on two semiconductor capital equipment firms: KLA-Tencor Corp. (KLAC:KLA-Tencor Corporation
News, chart, profile, more
KLAC 32.15, -2.18, -6.3%) and Varian Semiconductor Equipment (VSEA:varian semiconductor equipmn com
News, chart, profile, more
Last: 26.40-2.49-8.62%
3:21pm 09/22/2008
VSEA 26.40, -2.49, -8.6%) .
Analysts and investors have expressed hope that the chip-tools makers might rebound in the second half of the year. But in a research note, Kumar said that's not likely to happen, based on demand trends.
"There are larger concerns with weaker-than-expected end-demand trends for semis in general and memory in particular," the note said. "We appear to be progressing deeper into the woods."
Credit Suisse specifically cited slowing demand "across the board for multiple products," including personal computers and handsets, and in different markets, including small and medium-sized businesses, the U.S. and Europe.
Credit Suisse downgraded KLA-Tencor, citing stiffening competition with Applied Materials Inc.
AMAT 15.67, -0.23, -1.4%) . Kumar also cut his rating for Varian, also based on weakening demand.
Shares of Varian were down more than 8% Monday afternoon, while KLA-Tencor shares fell 5.4%. Applied Materials stock was also down a fraction.
Groeten en Sterkte