Varian Semiconductor Equipment Associates Inc.  (VSEA) Trade Now »     Rate VSEA  -  Discuss VSEA  -  Add to Watch List        

Soleil Securities analyst Nikolay Tishchenko this morning cut his rating on Varian Semiconductor (VSEA) to Hold from Buy after weak Q1 results and disappointing guidance yesterday from the semicoinductor equipment supplier. He maintains his $24 price targe on the stock, which yesterday closed at $25.59.

Offering no signs of a recovery semiconductor equipment demand, Varian Semiconductor (VSEA) this afternoon posted revenues for its fiscal second quarter ended April 3 of $63.8 million, down a whopping 75% from a year ago, and below the Street at $65.4 million. The ion implant equipment company posted a loss of 27 cents a share, one penny less than expected.

Could the DRAM market be flipping to shortage from glut?

That possibility is powering big gains today by both the memory chip stocks and the semiconductor equipment companies that supply them with manufacturing gear. Triggering the rally this morning: bullish comments on DRAM from Frank Huang, the chairman of Taiwan-based Powerchip.

The large-cap semiconductor equipment stocks this afternoon have caught fire:

• Applied Materials (AMAT) is up 73 cents, or 8.4%, to $9.47.
• Novellus (NVLS) is up 55 cents, or 4.4%, to $13.
• Lam Research (LRCX) is up $1.07, or 5.5%, to $20.70.
• KLA Tencor (KLAC) is up 78 cents, or 4.5%, to $18.11.
• Varian Semi (VSEA) is up 58 cents, or 3.2%, to $18.86.

If there is a fundamental catalyst for the move, I can’t find it. Anyone have any clues?

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