Understanding the Chip Dip

S&P's David Kaplan talks about the semiconductor industry, his negative outlook on chip equipment, and his advice for investors

The health of companies that make equipment to build and test semiconductors has become more correlated to the health of the overall economy given that chips are now used in everything from airbags to digital music players. If the economy slows next year, as many experts predict, sales for both chipmakers and the equipment suppliers could be crimped, according to David Kaplan, who follows semiconductor equipment stocks for Standard & Poor's Equity Research.

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