NEW YORK ( TheStreet) -- Magnachip Semiconductor ( MX) and Axcelis Technologies ( ACLS) are among 12 semiconductor stocks that could see significant gains in the coming year.
Global semiconductor sales rose 1.3% to $25 billion in May from a yeatr earlier, supported by demand for tablets and e-readers. Sales were up 1.8% sequentially from April. The Asia-Pacific region recorded the strongest sequential sales growth: 3.6%. Looking ahead, the Semiconductor Industry Association (SIA) reaffirmed its global semiconductor sales growth forecast of 5.4% for 2011. As per data compiled by global trade association Semiconductor Equipment and Materials International (SEMI), semiconductor companies will invest a record $44 billion in 2011 in production equipment worldwide. Average price targets of analysts surveyed by Bloomberg imply that these stocks could rise from 7.5% to 71% over the coming year. The stocks are listed in ascending order of upside implied by consensus price targets.
12. MKS Instruments ( MKSI) produces instruments used to measure and isolate gases in the manufacture of semiconductors and other products. The company has three main product groups: Instruments and Control Systems, Power and Reactive Gas Products and Vacuum Products. MKS plans to report second-quarter results July 20. Analysts surveyed by Bloomberg expect the company to report sales of $220.7 million, little changed from $220.6 million a year earlier. Net income for the quarter is seen at $33.75 million, or 63 cents per share, compared with $33.37 million, or 65 cents. Gross margins for the quarter is estimated at 45% vs. 44.1%. Of the five analysts covering the stock, 60% rate it a "buy" and 20% rate it a "hold." Analysts polled by Bloomberg expect the stock to gain an average of 7.5% to $28.50 in the upcoming 12 months. In mid-June, the company paid its authorized quarterly cash dividend of 15 cents per share.
11. Novellus Systems ( NVLS) makes chip equipment. The company operates in two segments: the Semiconductor Group and the Industrial Applications Group. NVLS is scheduled to release second-quarter earnings July 11. Of the 16 analysts covering the stock, 44% recommend it as a "buy," and 50% a "hold." Analysts polled by Bloomberg expect the stock to gain an average 8.2% to $39.50 over the next 12 months. The same poll projects sales of $352.6 million, up 10% from a year earlier. Net income is pegged at $64.6 million, or 76 cents per share, compared with $63.4 million, or 66 cents. Gross margins will widen by 2%. The company recently announced that it shipped a VECTOR(R) plasma-enhanced chemical vapor deposition (PECVD) system to Xurui Guangdian, a joint venture company in China. SemiLEDs, a leading manufacturer of high-brightness light-emitting diodes (LEDs), is a partner in the venture. The new VECTOR will be installed at the SemiLEDs' plant in Foshan, China, and will be used for the manufacture of SemiLEDs' MvpLED high-efficiency LED products.
10. Maxim Integrated Products ( MXIM) makes a range of linear and mixed-signal integrated circuits, commonly referred to as analog circuits. The company is due to release fiscal fourth-quarter earnings July 29. Of the 27 analysts covering the stock, 44% say it's a "buy" and 48% a "hold." Analysts polled by Bloomberg expect the stock to gain an average 10.2% to $28.38 in the upcoming 12 months. Net income is forecast at $129.3 million on sales of $626.4 million versus net income of $58.5 million on $566 million in sales, per the Bloomberg poll. Earnings per share are seen at 42 cents, up from 19 cents.
9. Cypress Semiconductor ( CY) operates in the following segments: Consumer and Computation Division, Data Communications, and Memory and Imaging, and Emerging Technologies. The company also offers West Bridge peripheral controllers, universal serial bus (USB) controllers, general-purpose programmable clocks and a portfolio of static random access memories. It will report second-quarter results July 22. Of the 19 analysts covering the stock, 58% recommend it as a "buy" and 32% say it's a "hold." Analysts polled by Bloomberg foresee the stock gaining an average 12.1% to $24.50 in 12 months. Estimates collected by Bloomberg show the company may report sales of $251.7 million, up 13% from $223.02 million. Net income is seen at $59.94 million, or 30 cents per share, which compares to $47.97 million, or 24 cents. The company recently introduced the industry's first USB 3.0 (SuperSpeed USB) product, built to improve the performance of mobile phones. It also introduced a new USB OTG and USB 2.0 product for mobile devices -- the West Bridge Bay controller. These two products are expected to reach full production by September.
8. Hittite Microwave's ( HITT) products are deployed in a raft of applications and markets, such as automotive, broadband, cellular infrastructure and fiber optics, among others. HITT is scheduled to release second-quarter results July 21. Of the six analysts covering the stock, 50% recommend it as a "buy" and the rest say it's a "hold." Data from Bloomberg has analysts forecasting the stock rising 12.3% to $70.20 in the coming 12 months. According to consensus estimates from Bloomberg, the company may report sales of $68.52 million, increasing 16% from a year earlier. Net income is seen at $20.25 million, or 67 cents per share, which compares to $19.16 million, or 64 cents. The company recently launched three new ADCs suitable for digital storage oscilloscopes (DSOs). The three products feature integrated functions and can be evaluated with the Hittite EasySuite evaluation kits.
7. Ultratech ( UTEK) develops photolithography and laser-thermal-processing equipment designed for chipmakers. The company's second-quarter earnings are due July 21. Of the five analysts covering the stock, 60% say it's a "buy" and the rest rate it a "hold." Analysts polled by Bloomberg expect the stock to increase an average 21.4% to $37 within a year. According to a Bloomberg poll, the company may report sales of $52.07 million, up 65% from $31.55 million. Net income is seen at $9.54 million, or 35 cents per share, versus $3.62 million, or 15 cents. In early May, the company announced the opening of its Asia Technology Center (ATC) in Taiwan, which will build products for the emerging HB-LED market.
6. Lam Research ( LRCX) makes semiconductor-processing equipment used in the fabrication of integrated circuits. The company's etch and clean technologies enable customers to build integrated circuits. LAM will release fiscal fourth-quarter results July 28. Net income is forecast at $138 million on sales of $749 million, compared to net income of $140 million on $695.3 million in sales, according to analysts polled by Bloomberg. Earnings per share are seen at $1.09, down marginally from $1.10 cents. Of the 15 analysts covering the stock, 53% recommend it as a "buy" and 27% as a "hold." Analysts polled by Bloomberg expect the stock to gain an average 23% to $54.78.
5. KLA-Tencor ( KLAC) makes equipment for the semiconductor and related nanoelectronics industries. The products are used in a number of other industries including the high brightness light emitting diode (HBLED), data storage and photovoltaic industries, as well as general materials research. The company will announce second-quarter results July 29. Net income for the fourth quarter is forecast at $232.2 million on sales of $872.8 million, compared to net income of $113 million on $559.4 million sales, according to analysts polled by Bloomberg. Earnings per share are seen at $1.36, up from 66 cents. Of the 16 analysts covering the stock, 50% say it's a "buy" and 38% a "hold." Analysts polled by Bloomberg expect the stock to gain an average 23.7% to $50.23.
4. TriQuint Semiconductor ( TQNT) makes products for communications applications. The company will report second-quarter results July 28. Sales are projected at $235.3 million versus $207.5 million, as per a Bloomberg consensus. Moreover, earnings are expected to grow to $29.8 million, or 17 cents per share, from $22.5 million, or 14 cents. Of the 13 analysts covering the stock, 54% recommend it as a "buy" and the rest a "hold." Analysts polled by Bloomberg expect the stock to gain an average 42.3% to $14.50. Analysts at UBS recently initiated coverage on the stock with a "neutral" rating and price target of $11.
3. Mattson Technology ( MTSN), makes semiconductor-wafer-processing equipment used in the fabrication of integrated circuits. The company supplies dry strip and rapid thermal processing (RTP) equipment to the global semiconductor industry. Mattson has design and manufacturing centers in the U.S., Canada, Germany and Korea, and diversified customers including foundries, memory and logic-device manufacturers located across the world. The company will release second-quarter earnings July 21. Of the seven analysts covering the stock, 29% recommend it as a "buy" and the rest a "hold." Data from Bloomberg has analysts forecasting the stock gaining 60.8% to $3.20 in the coming 12 months. For the second quarter, a Bloomberg consensus shows the company reporting sales of $45.82 million, increasing 43% from $32.12 million. The net loss for the quarter narrowed to $5.19 million, or 17 cents per share, compared to $8.29 million, or 10 cents, the survey says. The company recently announced that it has received follow-on multi-system orders and has started shipping paradigmE etch and SUPREMA strip tools to a semiconductor manufacturer. These systems will be used for advanced etch and strip applications to produce chips that will be used in devices such as smartphones, personal computers and solid-state drives. Besides, Mattson and MesoCoat signed an exclusive supply agreement under which MesoCoat will purchase an escalating minimum number of Vortek arc lamps from Mattson annually. The aggregate value of the purchase has the potential to exceed tens of millions of dollars over the term of the agreement, and includes a $2 million exclusivity fee.
2. Axcelis Technologies ( ACLS) makes implantation, dry strip and other processing equipment used in the fabrication of semiconductor chips. Moreover, the company provides aftermarket service and support, including spare parts, equipment upgrades, maintenance services and customer training. Earnings for the second quarter are scheduled for July 28. Of the three analysts covering the stock, 67% recommend it as a "buy." Analysts polled by Bloomberg expect the stock to gain an average 68.5% to $3 in the coming 12 months. As per a Bloomberg consensus, the company is likely to report sales of $86.60 million, increasing 49% from $58.2 million. The company is seen swinging to a net profit of 1 cent per share from a net loss of 4 cents. Gross margins are seen widening to 34.5% from 33.4% in the first quarter. The company recently announced that a major foundry has selected its Integra ES plasma dry strip system to support advanced, high-volume device manufacturing facilities. Shipments of dry strip systems have started this month to multiple fabs worldwide.
1. Magnachip Semiconductor ( MX) is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for consumer applications, such as mobile phones, digital televisions and digital cameras. The company will announce fiscal first-quarter results July 27. Net income is forecast at $20 million on sales of $200 million compared to a loss of $30.7 million on $194.7 million sales, analysts polled by Bloomberg report. Earnings per share are pegged at 51 cents. Recently, the company along with ELMOS Semiconductor, announced it would ramp up production and start delivery of 0.35µm automotive qualified processed wafers to ELMOS. These process technologies target the automotive semiconductor market. Of the five analysts covering the stock, 80% says it's a "buy" and the rest a "hold." Analysts polled by Bloomberg expect the stock to gain an average 71.4% to $19.63 in value from current levels.