) to buy from neutral.
Analyst Stephen Chin says he sees 300mm wafers (which have higher prices and margins) growing to 20% of shipments in 2006 from 12% in 2004. He sees higher-margin epitaxial/prime wafers growing to 70% of 300mm sales from about 60%.
He says his checks suggest polysilicon and raw material used to make silicon wafers, are in tight supply -- MEMC has its own polysilicon plants, which should drive share gains over those who lack these operations or long-term agreements with suppliers.
He raises $1.02 2005 earnings per share estimate to $1.10 and $1.06 2006 earnings per share to $1.34 on an improved outlook. He raises his $14 target to $17.