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CIBC World upgrades chip-equipment maker KLA-Tencor (KLAC
) to outperform from sector perform.
Analyst Ali Irani says the first-quarter upside and flat sequential second-quarter guidance confirm to him that the chip-equipment maker can buck a current downdraft in tooling as it benefits from a robust backlog, stronger-than-average demand for its process diagnostic and control (PDC) equipment and a favorable product mix shifts into 90nm chips.
Irani notes, with little competition in PDC, and thus superior pricing power, KLA-Tencor is benefiting from challenging fabrication migrations to 90nm chips and a rising number of 65nm pilot lines that require earlier demand for its newest tool-sets.
Trani sees $2.26 fiscal 2005 (Jun) earnings per share, and ups his $54 price target to $66.