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Applied Materials (AMAT -1%) now expects the chip equipment industry to contract by 5%-15% in...

Applied Materials (AMAT -1%) now expects the chip equipment industry to contract by 5%-15% in 2013, a forecast easily worse than a recent Gartner estimate for a 0.8% increase. Applied, which offered soft FQ1 guidance yesterday to go with its FQ4 beat, mentioned on its earnings call it expects chip wafer starts and utilization rates to drop again in FQ1. Its outlook for solar equipment demand is predictably bleak, though the company is a little more optimistic about a rebound in LCD equipment orders.
Comments (1)
  • Time to buy.

     

    Historically, one makes money buying good quality but out-of-favor stocks. AMAT today fits the bill. The bad news is out there. The next 18 months will be difficult, but, ultimately, the demand for wafer fabricating equipment will rebound.

     

    Make no mistake though. AMAT is no growth story. It is a cyclical stock and has been for a while. It has a decent dividend, a good cash position and requires relatively little cap ex.

     

    I wish they had left the god-forsaken solar market alone though. It is a money pit and has destroyed value for AMAT shareholders.
    16 Nov 2012, 12:49 PM Reply Like
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