Semiconductor equipment makers KLA-Tencor and ASML stocks fall 3.4 percent in late trading

Semiconductor industry is declining by the day due majorly to the aching global economic health. KLA-Tencor and ASML Holding were two more companies that received the negative effect. The shares of both companies were down 3.4 percent down in late trading.

Deutsche Bank’s downgrade of stocks hit both ASML and KLA, both had a 28 and 12 percent increase in the share prices, respectively.

Though ASML had strong footing in the market, the decreasing demand in such products has forced investors to step away slowly, Deutsche Bank analyst Kai Korschelt was of the opinion.

“Despite ASML’s strong industry position, we see 2013 consensus expectations as too bullish,” he said. With secular demand head winds also muting memory (chip) spending, in our view, ASML’s 2013 EPS could decline year-over-year.”

Another analyst from the bank, Vishal Shah, had the following take on KLA-Tencor “We do not believe that consensus is accurately pricing the downside risk to KLAC’s earnings in 2013. Currently the street expects EPS of $4.69, vs. our estimate of $4.13.

“Embedded in the Street’s earnings estimate is revenue growth of 6%, compared to our estimate of a 4% decline in revenue. Given the potential head winds within foundry, slowing demand for process control equipment and a slower than expected recovery in memory (chip production), we believe these estimates are overly optimistic.”

The top chip-gear maker Applied Material had no response from investors on the news. Its share price remained stagnant in the afterhours trading.

ASML and KLA-Tencor are two of the main companies in the industry and have been showing profitability in both consumer and stock markets. However, the slowly decreasing demand of semi-conductor all over the world has forced the Street and big investment companies to keep trading in their stock.

Previously, Intel and Texas Instruments, two US-based companies saw a decrease in their stocks due to more or less the same reasons.

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Posted by Usman Khalid on Aug 30 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.