A pickup in spending is expected in the second half of the year in the memory segment of the semiconductor capital equipment space for companies levered to developments in DRAM and NAND flash, says Patrick Ho, Vice President at Stifel Nicolaus & Co., Inc.
“Overall, we should see a pickup in NAND flash in the second half of the year, and that should trickle down positively for capex spending in that customer segment,” he said. “I think what I characterize as what I call a wild card is DRAM. I think DRAM is beginning to show some signs of recovery.”
Ho recommends Lam Research Corporation (LRCX) in terms companies that will benefit from a recovery in memory. When looking at the group as a whole, he likes Lam Research based on, not only near-term industry fundamentals, but also longer term due to the acquisition of Novellus Systems, Inc.
“Plus, by their acquisition of Novellus, I do believe that it opens up opportunities with Intel that Lam Research never had before this deal. So both near term and long term, I do like that name, it’s one of my preferred names at this time,” Ho said.