Wednesday, December 06, 2006

Calls of Note Part 1

- CIBC notes that over the past few days, their meetings in Asia with chipmakers and equipment suppliers alike have netted one clear, key takeaway: The Vista-driven PC product cycle is here. Accelerating demand pull from PC OEMs' forecast in 1Q07 has chipmakers scrambling and pulling-in tool orders.

The ultimate barometer of this is foundries: Firm's checks suggest TSMC is well ahead of internal rev forecasts for PCs in 4Q (from down ~5-10% Q/Q, now closer to flat), despite ATI's cut to wafer starts to correct inventory. TSMC is pulling-in tool orders for Fab14 into 4Q making it a ~5% customer.

Other points in the PC supply chain are seeing much better than seasonal demand pull in 1Q07, e.g., according to rolling forecasts from PC OEMs incl. Dell and Lenovo, DRAM makers gearing for solidly positive Q/Q growth in 1Q, catalyzing acceleration of schedules for Inotera, & Elpida/Powerchip JV.

NAND Flash not down and out--Toshiba ordering for new Fab4 shell in 1Q. Total memory orders, in fact, tracking higher in 1Q. Stay long favs LRCX, AMAT. MTSN leverage is looking particularly big in 1Q. NVLS no longer a short, Dec orders whipsawing back up to flat to -5% Q/Q vs. -5%-10% Q/Q.

Notablecalls: Not actionable but good to know category. I guess it's good news for Micron (NYSE:MU)as well.

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