- In its Q4 report, TSMC (a top-3 chip equipment buyer, along with Intel and Samsung) set a 2016 capex budget of $9B-$10B, a healthy increase over reported 2015 capex of $8.12B. The spending will help finance TSMC's 16nm manufacturing process ramp and the start of production (towards the end of 2016) for its 10nm process.
- A slew of chip equipment makers are outperforming amid a 1.8% Nasdaq gain. The list includes Applied Materials (AMAT +4.3%), ASML (ASML +3%), Teradyne (TER +2.4%), Axcelis (ACLS +6.6%), Xcerra (XCRA +5.5%), Ultratech (UTEK +4%), Advantest (ATE +2.2%), and merger partners Lam Research (LRCX +4.1%) and KLA-Tencor (KLAC +2.9%).
- Rudolph Technologies (RTEC +11.5%) is benefiting from an upgrade to Buy from Sifel's Patrick Ho. He cites strong advanced chip packaging exposure, a new CEO, an improved ability to land repeat orders, and a belief Rudolph is an attractive M&A target.
- 2016 industry expectations have been low - Gartner recently forecast wafer fab equipment spend would drop 2.5% this year to $31.1B due to weak DRAM capex, after staying roughly flat in 2015 amid Intel/TSMC capex budget cuts. 8.1% and 9.1% growth is respectively forecast for 2017 and 2018.
- Intel reports after the bell. In November, the CPU giant set a 2016 capex budget of $10B (+/- $500M), up from 2015's depressed $7.3B (+/- $500M).
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Update (4:35PM ET): Intel has used its Q4 report to cut its 2016 capex budget by $500M to $9.5B (+/- $500M). Some chip equipment markers are down fractionally after hours.