Wednesday, August 11, 2010

OSAT changes, investor outlooks, and Intel rumors

A pre-farewell to longtime Kulicke & Soffa chief C. Scott Kulicke who's retiring at the end of September, a bit ahead of schedule. The Street, however, might be more fleeting with its show of appreciation. Bank of America/Merrill Lynch's Krish Sankar lowered his rating on KLIC to Underperform from Buy, suggesting current high-flying business will be "difficult to sustain" into 2011 as capex trends, particularly backend/OSATs, winds down.

A tale of two investment reactions. One in the positive, responding to NANO's smashing of estimates and subsequent comments, including that Hynix now contributes >10% of sales. VECO, on the other hand, took it on the chin on word of a rumored "digestion period" among LCD makers, which may increase reliance on subsidy-driven Chinese suppliers.

This week's so-crazy-it-just-might-work rumor: FTC's reported settlement with Intel has a key provision that would modify its IP deal with Taiwan's Via Technologies, possibly allowing other partnerships -- or even a JV or outright acquisition of the x86 firm should anyone be bold enough to want to toe up to the chip giant. "There are a lot of easier things you can do in this world than compete with Intel in microprocessors," muses Barrons' Eric Savitz, "but there might a company or two out there that is crazy enough to try."

Market Diary: Most Active Issues ADVANCES: 20

LARGEST DOLLAR GAINER: Nanometrics Inc. with 3.67 (39.46%)

LARGEST DOLLAR LOSER: Veeco Instruments Inc. at -7.93 (-17.58%)

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--James Montgomery, news editor, compiled this data

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