Analyst sees slow start, recovery to SEMIndex in 2001

San Jose, California–The SEMIndex, a web-based global equity index of 68 manufacturers of semiconductor equipment and materials, produced for Semiconductor Equipment and Materials International (SEMI) by Beacon Hill Partners, Inc., closed the fourth quarter of 2000 on December 31 at 217.06–down 23.35% from the previous year period, but up 117% from its inception at 100 on January 4, 1999.

In order to be included in the SEMIndex, a company must have a market capitalization of at least US$50 million, and derive 50% or more of its revenues from sales to the semiconductor and/or semiconductor-related industries.

The SEMIndex is made up of three regional sub-indices–the U.S., Japan, and Europe. The U.S. SEMIndex (50 companies) declined 32.84% in 2000, and closed the year at 150.36 vs. 223.88 in 1999. Japan’s SEMIndex (8 companies) led the retreat, closing at 166.17, down 60.75% from 423.32 a year ago. Europe’s SEMIndex (10 companies), however, lost only 5.75% during the same period.

“The capital equipment sector did not decline as significantly as the broader technology market and the Nasdaq last year, in part because it has been historically valued on a more rational multiple-of-earnings basis, as opposed to other technology sectors where values have been based on revenue,” explains John Pitzer, senior vice president, capital equipment analyst at Credit Suisse First Boston. “Following an initial boost caused by reaction to the just announced Fed interest rate cut, the SEMIndex may have a slow start in 2001. I suspect that the SEMIndex will see a recovery in the second half of the year as the industry works off oversupply and deals with end-market demand. Clearly, the sector represented by the SEMIndex is a long-term dynamic investment growth vehicle.”

In comparison to the SEMIndex, the U.S.-based Nasdaq Composite index declined more than 37% during the same 1-year period.


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