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Monday, October 16, 2006

Somebody Tell Mike Splinter There’s A Slowdown Coming (AMAT)

By William Trent, CFA of Stock Market Beat

Applied’s Splinter confident about industry spend in 2007, has no plan for 18 inches
Mike Splinter, CEO of Applied Materials, said on October 9 he is confident about the capital expenditure (capex) of the global semiconductor industry in 2007; he also indicated the company has no plan to develop 18-inch wafer production.

Estimating high-single-digit percentage growth for global semiconductor-industry capex in 2006, Splinter is highly confident about industry capex in 2007, while being especially optimistic on rising investments from Taiwan-based memory houses.

Global semiconductor capex will exceed US$50 billion in 2007, up from US$47.3 billion in 2006, sources said.

We beg to differ.
Electronic News: Silicon foundry leader Taiwan Semiconductor Manufacturing Corp. Ltd. has seen a slowdown in sales for September, mirroring the experience of its smaller rival, United Microelectronics Corp. (UMC).

Of course, the Mike Splinter called the bottom of the last slowdown for about 8 consecutive quarters, so what should we expect?

The author may hold a position in the securities discussed. A current list of the author's holdings is available here.

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