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UMS Holdings ended 7.317% higher

UMS Holdings (558.SI) ended 7.317% higher to close at S$0.220 per share. The stock has since rose 30% higher in just two months.

Fundamentally, the higher confidence on UMS Holdings and its peers could be due to the improving semiconductor and electronics sector. On downside, technical analysis reveals the stock may be overbought.

Fab tool book-to-bill jumps

Mark LaPedus
(02/18/2010 7:15 PM EST)

SAN JOSE, Calif. -- The fab tool business is heating up after a major downturn.

Tool bookings are up and at their highest levels since April of 2008. But many ask a simple question: How long will the party last before the next downturn? Some say we are in a two-year super cycle. Others see a slowdown in mid-2010.

In any case, North America-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 1.20 in January, up from 1.07 in December, according to SEMI. A book-to-bill of 1.20 means that $120 worth of orders was received for every $100 of product billed for the month.

"Semiconductor capital equipment bookings are at the highest level since April 2008," said Stanley Myers, president and CEO of San Jose-based SEMI, in a statement. "The book-to-bill ratio of 1.20 reflects the robust capex spending plans announced by semiconductor device manufacturers over the past several months."

The three-month average of worldwide bookings in January 2010 was $1.13 billion. The bookings figure is up 24.1 percent from the final December 2009 level of $912.7 million, and more than three times higher than the $277.2 million in orders posted in January 2009.

The three-month average of worldwide billings in January 2010 was $946.3 million. The billings figure is 11.3 percent greater than the final December 2009 level of $850.1 million, and 62.0 percent more than the January 2009 billings level of $584.2 million.

Some wonder if the party will soon end. U.S. weekly leading economic indicators are pointing to a weakening of the U.S. economy in mid-2010, resulting in a slowdown in semiconductor revenues, according to The Information Network, a research firm.

Semiconductor revenues will grow 11.2 percent in 2010 to $245 billion, up from $220 billion in 2009, according to the firm.

Forecasts are pointing to global capex growing more than 50 percent in 2010. With the slowdown in chip sales, semiconductor manufacturers will reduce capital spending to the 20 percent range, according to the firm.

Still, fab tool vendors are seeing an upturn. Vendors are posting mixed results. As reported, Applied Materials Inc. this week posted strong results in the quarter amid a rebound in the fab and LCD tool markets.

Japan's Ulvac Inc.'s ''results were announced last week, and were better than expected, in our view. Sales were under plan due to delays in shipments in solar gear, but profits were over plan,'' said David Motozo Rubenstein, an analyst with MF Global FXA Securities Ltd., in a report.

''The key takeaway from Q2 results and our conversations with Ulvac is that the LCD equipment business is very strong, and that the 2H company forecast for LCD orders is conservative. We understand that China LCD panel projects have not been decided by the Korean majors, but are official at three non-Korean companies,'' he said.

Ion implanter supplier Axcelis Technologies Inc. reported third quarter revenue of $35.0 million, compared to $33.6 million for the second quarter of 2009.

Net loss for the third quarter was $15.9 million, or minus $0.15 per share. This compares to a net loss for the second quarter of 2009 of $22.4 million, or $0.22 per share of which $4.1 million ($.04 per share) was attributable to restructuring charges.

In the corresponding quarter for the previous year, the company reported revenue of $46.5 million, and a net loss of $24.7 million, or $0.24 per share.

Metrology tool vendor Nanometrics Inc. said revenues were $26.3 million, up 2 percent from $25.8 million in the third quarter of 2009 and up 29 percent from $20.5 million in the fourth quarter of 2008. Net loss was $0.3 million, or $0.01 per diluted share, compared to net income of $1.6 million, or $0.08 per share, in the third quarter of 2009 and a net loss of $2.6 million, or $0.14 per share, in the fourth quarter of 2008.

Rival Nova Measuring Instruments Ltd. said revenues for the fourth quarter of 2009 were $15.2 million, an increase of 145 percent relative to the fourth quarter of 2008, and an increase of 34 percent relative to the third quarter of 2009.

On a GAAP basis, the company reported quarterly net income of $2.7 million in the fourth quarter of 2009, or $0.13 per diluted share. This compares to a GAAP net loss of $1.6 million, or $0.08 per share, for the fourth quarter of 2008, and a net income of $1.7 million, or $0.08 per diluted share, for the third quarter of 2009.

On the materials side, photomask maker Photronics Inc. said sales for the first quarter were $98.2 million, an increase of 12 percent compared to $88.0 million for the first quarter of fiscal year 2009.

GAAP net income was $0.2 million, or $0.00 earnings per diluted share, compared to net loss attributable to Photronics, Inc. of $10.2 million, or $0.25 loss per share for the first quarter of fiscal 2009.

In a statement, Constantine Macricostas, Photronics' chairman and chief executive, commented: "First quarter sales improved sequentially in what is normally a slow period seasonally and marked the sixth consecutive quarterly increase of high-end integrated circuit photomask sales. Improvement in sales of both high-end flat panel display and integrated circuit photomasks confirms the continued success of our market penetration strategy."

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