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Semiconductor Equipment Hyper Growth Heading Into Semicon West Trade Show

Jul. 10, 2017 11:14 AM ETAMAT, LRCX, SSNLF, MU, WDC7 Comments


  • Semicon West, the key trade show for semiconductor equipment sellers and buyers, starts this week in San Francisco.
  • Analysts have upped stock valuations on leading equipment manufacturers, which has raised stock prices for the entire sector.
  • Year-on-year, semiconductor equipment growth has reached 55%, but continued hyper growth may be unsustainable based on chip growth.

A July 7, 2017 Investor Business Daily Headline noted:

“Two Chip-Gear Stocks Soar On Bullish Report Ahead Of Big Conference”

The article goes on to report:

“Morgan Stanley raised its price targets on two major chip-gear stocks on Friday ahead of Semicon West, a semiconductor capital equipment conference that will run July 11-13 in San Francisco. Morgan Stanley analyst Joseph Moore reiterated his overweight ratings on Applied Materials (AMAT) and Lam Research (LRCX). He increased his price target on Applied Materials to 52 from 47 and upped his target on Lam to 168 from 135.”

As a result, Applied Materials was up 3.4% to close at 43.54 on the stock market on July 7 while Lam finished 3% to 148.13.

Analyst Moore goes further to expound on his argument by stating:

“Applied Materials and other chip-gear firms at Semicon West are likely to show increased confidence in the longer term prospects for the industry.”

Was he right? Definitely not – on two counts. While Semicon West is the largest semiconductor equipment trade show and will start July 11, 2017, both Applied Materials and Lam Research are not among the list of exhibitors.

More importantly there is no correlation between business improvement and Semicon West. I’ve plotted equipment billings from 2010 through 2016 and compare it to Semicon West dates in the chart below. The billings data come from SEMI, the industry consortium that is the organizer of Semicon West, which stopped supplying billings data in January 2017.

As shown in the chart, billings basically decrease in the months following Semcon West, which is held in early July of each year.

I’ve been attending Semion West since 1982 when it was first held at Bay Meadows in the San Mateo Fairgrounds. In fact, I spoke at several technical programs held as part of

This article was written by

Robert Castellano profile picture
Providing a deep knowledgebase for better semiconductor stock investments

Dr. Robert N. Castellano, is president of The Information Network www.theinformationnet.com. Most of the data, as well as tables and charts I use in my articles, come from my market research reports. If you need additional information about any article, please go to my website.

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I received a Ph.D. degree in chemistry from Oxford University (England) under Dr. John Goodenough, inventor of the lithium ion battery and 2019 Nobel Prize winner in Chemistry. I've had ten years experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University.

I have been Editor-in-Chief of the peer-reviewed Journal of Active and Passive Electronic Devices since 2000. I authored the book "Technology Trends in VLSI Manufacturing" (Gordon and Breach), "Solar Panel Processing" (Old City Publishing), "Alternative Energy Technology" (Old City Publishing). Also in the solar area, I am CEO of SolarPA, which uses a proprietary nanomaterial to coat solar cells, increasing the efficiency by up to 10%. I recently published a fictional novel Blessed, available on Amazon and other sites.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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