NEW YORK (AP) — Samsung Electronic Co.'s surprise announcement that it was boosting capital spending on semiconductor production by about $1.2 billion sent shares of chip equipment vendors higher Friday.
Shares of Rudolph Technologies Inc., Varian Semiconductor Equipment Associates Inc., Applied Materials Inc., Novellus Systems Inc. and Lam Research Corp. all rose, though several are still down week-to-date.
Samsung, the world's largest memory chip maker, reported a 1 percent profit increase Thursday, after three straight quarters of declining earnings. The South Korean technology company plans to shift projects targeted for 2008 into this year, said Stifel Nicolaus analyst Patrick Ho in a note to investors.
Ho called the news a ''clear positive'' for chip equipment companies, but noted that the shift could reduce the year-over-year growth rate by increasing the 2007 but reducing the 2008 spending budget.
Shares of chip equipment vendors have been on the decline lately amid concerns over capital spending, and Ho said Samsung's announcement, while a positive surprise, ''further confuses the current market environment, as this adds to the mixed data points coming out of the space.''
Ho listed Varian Semiconductor, Lam Research, Rudolph and Applied Materials as those with ''meaningful exposure'' to Samsung among the companies he covers.
Rudolph's shares rose 38 cents, or 2.8 percent, to $13.80 in afternoon trading. The stock is still down about 7.5 percent week-to-date.
Varian's shares rose $2.67, or 5.8 percent, to $48.55; the stock is roughly flat for the week.
Shares of Applied Materials rose 81 cents, or 4 percent, to $20.94 and shares of rose 98 cents, or 3.6 percent, to $27.80.
The Philadelphia Semiconductor Sector index rose 6.4 points, or 1.32 percent, to 489.