- During a Credit Suisse conference talk, KLA-Tencor (KLAC -2.7%) CFO Bren Higgins stated his company's FQ2 (Dec. quarter) bookings could miss the midpoint of its guidance range. The potential shortfall is attributed to a $100M order push-out for reticle inspection tools used in the production of cutting-edge 10nm chips.
- KLA had guided on its FQ1 CC (transcript) for FQ2 bookings of $800M-$950M ($875M midpoint), up from FQ1's $790M and well above revenue guidance of $670M-$730M.
- Susquehanna's Mehdi Hosseini, who rates KLA a Negative, is "puzzled" by Higgins' explanation, given Intel (long at the bleeding edge of chip manufacturing) is the only company investing in 10nm R&D for now - the chip giant is just getting set to mass-produce 14nm chips - and that KLA's reticle inspection bookings have been in the ~$70M range in recent quarters.
- The reticle inspection market has been a weak spot for KLA. However, during an upbeat September conference talk, Higgins said demand was improving.
- Chip equipment sales have been expected to improve in 2014: Trade group SEMI just estimated sales will rise 23% in 2014, after dropping 13% in 2013.
- Several chip equipment peers have followed KLA lower: AMAT -3%. ASML -2.5%. LRCX -2.9%. RTEC -1.5%. MTSN -2.5%.
at MarketWatch.com (Oct 24, 2014)