UMS

UMS: Applied Materials (AMAT US), one of the world’s largest semiconductor eqpt makers and tester, saw its shares fall in US trading last night, after it sliced its sales and profit forecasts amid weakness in Europe, China, and the PC market. AMAT said its FYOct12 net sales won’t reach the previous outlook of US$9.1 - 9.5b. This view echoed remarks from Advanced Micro Devices, the second-biggest maker of processors for PCs, which yday blamed the same regions for an unexpected drop in 2Q sales. BNP notes how a slowdown in business from Asia, as well as limited demand for devices made by Research In Motion and Nokia, will lead other chipmakers and PC suppliers to forecast earnings that fall short of expectations. Says to expect more warnings in this global slowdown. AMAT is a key customer of UMS (contributes btwn 50-80% of sales) and owns 6% of UMS shares. Historically, order flows at AMAT are reflected about one quarter later in UMS revenues. UMS is -1.2% at $0.405, likely holding up on cheap valuations. The stock trades at 5.4x P/E, offers 12.2% yield.