Bloomberg News

TSMC Record Spending Plan Lifts Nova Measuring: Israel Overnight

January 17, 2013

Nova Measuring Instruments Ltd. (NVMI:US) climbed to the highest level since July on prospects the Israeli technology company will benefit from Taiwan Semiconductor Manufacturing Co. (2330)’s forecast of record capital spending in 2013.

Shares of the Israeli developer of measuring systems for the semiconductor industry gained 1.8 percent in New York to $8.42, a five-month high, after TSMC, as the semiconductor company is known, said it plans to boost spending to $9 billion this year from about $8.3 billion in 2012. The Bloomberg Israel- US Equity Index (ISRA25BN) of the largest New-York traded Israeli companies rose 0.4 percent to 86.75. Orbotech Ltd. (ORBK:US) gained after receiving $40 million in orders from a flat-panel display maker.

Nova Chief Executive Officer Gabi Seligsohn said in an interview yesterday that Nova is poised for a “strong” first half of 2013 after TSMC announced it will increase spending to meet mounting global demand for smartphones and tablets. Revenue for the Nes Ziona, Israel-based company will climb 2.6 percent this year to $97 million, according to the mean of two analysts’ estimates compiled by Bloomberg.

“Nova is one of the best companies in the equipment space that’s exposed to Taiwan Semi,” Patrick Ho, an analyst at Stifel Nicolaus & Co. said by phone from Dallas yesterday. “If TSMC is going to continue to build out equipment for the leading edge, Nova is in a position to benefit this year.”

‘Apple’s Ramp-Up’

TSMC, the world’s largest contract chipmaker, forecast first-quarter sales that surpassed analysts’ estimates. Chief Executive Officer Morris Chang said the Hsinchu, Taiwan-based company will allocate 88 percent of capital spending on units measuring 28 nanometers or less.

“If during the second half of 2013, the extent of Apple’s ramp-up at Taiwan Semiconductor will be high, then we have a chance to have a very, very strong 2013, and a nice increase in revenue,” Seligsohn said.

The company will probably (NVMI:US) report revenue of 94.5 million for 2012, an 8.1 percent decline from the previous year.

“The question for us is whether the industry continues spending into the second half,” Seligsohn said.

Nova Measuring is targeting acquisitions (NVMI:US) as the company seeks to expand process control products to boost revenue, Seligsohn said in a Dec. 27 interview, a day after announcing it received $15 million of orders for its tools from chipmakers.

Orbotech Rallies

Nova Measuring shares traded in Tel Aviv jumped 6.7 percent to 31.26 shekels, or the equivalent of $8.40, as Israel’s benchmark TA-25 Index (TA-25) slipped 0.1 percent to 1,207.67.

Orbotech gained for a fifth day in New York, adding 2.5 percent to $9.31, the highest since June 27, after receiving orders from a liquid crystal display panel manufacturer in China. The Yavne, Israel-based company said most of the equipment will be delivered in 2013.

Slowing demand for flat panel display equipment, which began in late 2011 “has bottomed, and things can’t get that much worse,” Olga Levinzon, an analyst at Barclays Plc, who has an equalweight, or neutral rating on the shares, said by phone yesterday from New York.

RRSat Global Communications Network Ltd. (RRST:US), the Israeli satellite video provider, extended its gain for the week to 17 percent as shares added 0.4 percent to $7.73 on trading volume that was five times the stock’s three-month daily average, according to data compiled by Bloomberg.

To contact the reporter on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


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Companies Mentioned

  • NVMI
    (Nova Measuring Instruments Ltd)
    • $10.39 USD
    • -0.05
    • -0.48%
  • ORBK
    (Orbotech Ltd)
    • $14.52 USD
    • -0.05
    • -0.34%
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