Semiconductor Industry 01 (Oct 08 - Jul 22)

[kanglc]

In Oct 2008, IM Flash laid off 800 people and delayed the construction of the high-tech factory at Bendeemeer Road due to the worsening economic conditions.

[financecaptain]

Are you kidding ? We know that for a fact in Q4 2009 already. You should take position then alreay not now ....

SG:Semiconductor Industry- Market recovery seems imminent

Summary: Recent quarterly results by semiconductor companies under coverage showed that chip and related segmental sales had improved in 4Q09, in line with our expectations. However, both companies’ capital equipment segmental performances disappointed in the quarter due to still weak business conditions in the capital equipment market.

Going forward, however, we are keeping our view that chip companies are likely to expand their capacity in 2010 amid rising utilization rates and an improving market outlook, hence spurring the sales of chip manufacturing equipment. Jan Book-to-Bill ratio of 1.20 (up from 1.03 in Dec and 0.47 in Jan 2009) provided by industry watcher SEMI appears to reinforce our point for higher capex spending plans by these companies.

We also note that iSuppli and Gartner, amongst other firms, had recently upped their 2010 worldwide semiconductor revenue growth forecasts to 20-22% (from 13-15% range in late 2009), in view of healthy sales momentum and improvements in economic conditions. We believe this is an indication of better growth prospects for semiconductor companies. As such, we are upgrading the semiconductor sector to OVERWEIGHT from NEUTRAL.

[winston]

From DMG:-

Gartner Says Worldwide Semiconductor Revenue to Grow 27% in 2010 (Bloomberg)
James Lim (6232 3892, [email protected])

The news: Worldwide semiconductor revenue in 2010 is forecast to reach US$290 billion in 2010, a 27.1% increase from 2009 revenue of US$228 billion, according to the latest outlook by Gartner, Inc. The outlook for the semiconductor industry has improved from Gartner's 1Q10 forecast, when it projected worldwide semiconductor sales to grow 19.9%.

Analysts said this improvement in market conditions is in part due to an accelerated broad-based recovery in all regions and most product categories.


Our thoughts: Worries over a slowdown in the Euro-zone affecting the global technology sector, if any, seem to be absent for now. With several IT market research firms recently upping their global growth forecasts for the various technology sub-sectors (PCs, hard disk drives, semiconductors, etc), we thus believe that the outlook for the tech space is still positive.

Given that semiconductors are regarded as the frontrunner of the entire technology chain, we therefore maintain our OVERWEIGHT recommendation on the technology industry.

[mrEngineer]

let me give some comments on this crap..

have u ever wondered why is semiconductor industry is actually booming?
Belonging to the lowest supply chain, who is actually ordering the wafers?
Why are they actually ordering? Is it because the entire world needs a new phone or tv or radio now? Or is it just because of replenshing inventory levels?

The ultimate question is: Is this sustainable long enough like e age of walkman, discmans were revolutionizing the world?

TSMC were giving 16 month bonuses before the tech bubble burst. Familiar?

[winston]

Hi mrEngineer,

My understanding is that, the first wave was due to the replenishment of the very low inventories.

The second wave was then about the massive stimulus in China eg. cars, electrical appliances etc.

Not sure where we are yet now. Once you have bought your PC, White Good, TV, Car etc., will you be going out to get another one so soon ?

I dont know this industry at all so would appreciate any kind update that you all can provide.

Take care,
Winston

[financecaptain]

DRAM DDR II prices are starting to fall.
PC and notebook orders for June are also lower than May.
The technology sector may have reached its peak .... do not be taken in by latest manufacturing figures and analysts' recommendation (usually they are 马后炮).
Just my view.

I posted above end of May.

When DRAM prices start to fall, good sign that semiconductor sector is reaching its peak and likely to go downhill from there.

Always beware of 马后炮 from analysts. Most fresh out from school or have zero industry expereince. They just take cue from publlished statistics which only show things have already happened - like news reporting.

[winston]

I recalled that Intel mentioned a few months ago that the growth in the industry will be from the US.

When people say, I just listen. Something I think it's logical, sometime I think it's illogical. But what do I know about the Semi-Conductor industry? I cant even predict the trend in my own industry

[winston]

TSMC sees world chip sales up 7 pct/year 2011-16

HSINCHU, Taiwan, June 15 (Reuters) - TSMC <2330.TW>, the world's largest contract chip maker, sees global chip sales rising 7 percent annually between 2011 and 2016, Chairman and Chief Executive Morris Chang told the company's annual shareholders' meeting.

Strong demand from China will lift the growth outlook for the semiconductor market to 6 or 7 percent for the next five years, Chang had told the Financial Times in an interview published on Monday.

Chang had forecast annual growth to slow to 4.2 percent in 2011-2014, partly as other new key component such as touch-screen panels are used in electronics products.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) posted record sales for a second month in May, buoyed by strong demand for computers and electronic gadgets.

TSMC has allocated record capital spending to boost capacity and upgrade technology to meet rising demand for new PCs and other consumer products that require more powerful chips.


Source: Reuters

[winston]

Not vested

Global chip sales growth to slow sharply in 2011 - iSuppli

* Global chip sales to grow 5.1 pct next year
* iSupply trims 2010 growth forecast for semiconductor sales


SEOUL, Oct 1 (Reuters) - Global semiconductor sales growth is set to slow next year due to an uncertain economic environment but the sector is not facing a dramatic downturn, market research firm iSuppli said.

iSuppli said on Thursday global semiconductor sales in 2011 are expected to climb by 5.1 percent, a significant slowdown from this year's projected growth of 32 percent.

The 2010 forecast was trimmed from a previous estimate of 35.1 percent, due to weakening consumer demand and rising inventories.

"Unstable economic conditions and worrisome market reports continue to create an environment of poor visibility and ongoing uncertainty in the electronics industry," Dale Ford, senior vice president at iSuppli, said in a statement.

"However, based on its most recent analysis of the electronics supply chain, iSuppli expects the chip business to experience a soft landing in 2011 and not to suffer the kind of dramatic downturn seen in 2009."

iSuppli expects semiconductor sales to drop 0.3 percent in the fourth quarter from the previous quarter, the first sequential drop since the market collapse in late 2008.

The economic slowdown has dampened consumer demand for PCs, the major application for chips, dragging down chip prices.

Still, the global chip industry is forecast to post a record-setting revenue of $302 billion this year, up from $228 billion in 2009 as it has rebounded from its worst-ever downturn, according to iSuppli.


Source: Reuters

[winston]

Not vested. From OCBC:-

Modest growth in 2011. Going into 2011, the semiconductor industry growth is likely to experience a modest growth of 5.1% as it follows the typical seasonality in the market, according to iSuppli.

As for chip equipment spending, we note that capex growth is also expected to slow to 4.9%, following
a 122.1% rise in 2010, based on projections by Gartner. We believe this will likely translate to a more tepid growth in revenue among the semiconductor companies under coverage (in line with our expectations).

In view of the moderating growth outlook, we now downgrade our view on the semiconductor industry to NEUTRAL. However, we keep Micro-Mechanics [BUY, FV: S$0.58] as our preferred pick due to its attractive upside potential and dividend yield.

http://www.remisiers.org/cms_images/res ... eutral.pdf