... As Visions of Silicon Danced in Their Heads
SAN JOSE, Calif. -- Photonic product suppliers who profit from the financial health of the semiconductor industry see little evidence that chip fabricators are ailing, if orders are an indicator. The Philadelphia semiconductor stock index has reflected uncertainty in recent months, but from the suppliers' points of view, the industry is hale and hearty.
"At this point in time we have seen no cancellations or deferrals of shipments," said Neal H. Sanders, spokesman for Robotic Vision Systems Inc. of Canton, Mass. The company reported about $47 million, or 75 percent, of its sales were to chip fabricators in the past quarter.
Sanders attributed recent bearish predictions to a leading analyst who compared the set of factors leading to the last cyclical downturn with current indicators, such as falling DRAM prices. In many cases, DRAM is being replaced by flash memory, he said.
Nikon Inc. of Melville, N.Y., similarly reported no slump in sales to chip fabricators. Company sales of video measuring and industrial measuring products to semiconductor manufacturers total about $7.5 million a year.
"All indications are that capital spending is going to continue very strong through March or April next year," said product manager Matthew P. Ryan. "All of the applications we've had show no sign of slowing down. We are actively quoting Intel and Texas Instruments, and the industry looks strong and healthy."
The Semiconductor Industry Association issued its own optimistic midyear market forecast in June, predicting a 31 percent total growth rate for 2000 and 25 percent for 2001. Most of the boost was attributed to the analog sector and to optoelectronics. The industry does not expect growth to slip significantly until 2002.
Photonics suppliers such as Veeco Instruments Inc. of Plainview, N.Y., expect orders to increase in the second half of 2000. Frank Reilly, sales and marketing director, said the fourth quarter is traditionally the best for chip fabricators because of big-ticket holiday spending on home computers, laptops, cell phones and the like. In comparison, for the first six months of the year Veeco's metrology bookings jumped 86 percent over the same period last year, giving the company a six-month book-to-bill ratio of 1.42.
"You're definitely seeing some people -- especially telecommunications companies -- who may be buying capacity they don't have orders for," he said. "A lot of people are making sure all their vendors are locked in. I believe that's getting people spooked.
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