SIA: August IC growth mixed, forecasts still in line

by James Montgomery, news editor

October 4, 2010 – Overall semiconductor sales are still in positive growth territory but the numbers slowed a bit in August for all but one region, according to the latest data from the Semiconductor Industry Association.

Inside the numbers:

  • Global semiconductor sales rose 1.8% to $25.7B, an improvement from July’s 1.2% increase and a sixth straight month of growth. Y/Y numbers continue to come down as the 12-month trailing period pulls further from the early 2009 trough.

    In a statement, SIA president Brian Toohey cited PC and wireless-related products and infrastructure expansion in emerging markets, particularly in China and India. Asia-Pacific overall was up 1.4% vs. 0% in July, and Japan 4.1% vs. 3.1%. "Concerns about economic conditions in the US and Europe, coupled with seasonal patterns, bear close monitoring," he added. The US and Europe showed declines, from 3.6% to 2% and 0.8% to 0.1%, respectively.

  • Top industry sector performances, as reported by Credit Suisse’s John Pitzer: DRAM memory (100% Y/Y) and discretes (39%), with most others in the 20%-30% range, trailed by DSPs (16%) and microprocessors (18%). Hottest application areas are industrials (50%) and automotives; less sparkly are comm/wireless (7%) and consumer (16%). He credits higher seasonal ASPs (excluding memory) as helping drive growth, offsetting some below-seasonal unit shipments. "Ex-memory, IC unit shipments remain 2.8% below long-term trends," he notes.
  • The moving three-month average shows a slight slowdown in the past few months. Chip sales were up 3.6% in the August-ended period, vs. 6.0% in the July-ending period. All regions still showed some slowing of growth, but are still in the black or on the line. The three-month moving average shows the Americas went from ~15% growth down to 10%, Asia-Pacific from 4.3% to 1.0%. Japan actually gained ground in August, improving from 5% to 8%+.
  • For the year through August, chip sales tallied $194.6B, up 44.4% from the same period in 2009. The SIA "remains confident" in its 28.4% growth forecast for 2010 (to $290.5B), which it plans to update on Nov.4. Given August’s numbers, the chip industry would need to add $95.6B over the next four months, averaging just shy of $24B…meaning flattish growth through year’s end. (Or slight growth and seasonal slowness in the final holiday-saturated months).

    Pitzer, though, suggests if the rest of the year follows historical trends, then revenues would pull in at about 26.6% growth, below current estimates from both the SIA (28.4%) and Wall Street analysts (28.7%). Those historical seasonality trends would peg September IC (ex-memory) sales at ~24% and 3Q sales at ~10%. "While bears continue to be concerned that semis have outgrown end demand on a q/q basis over the past several quarters, we would highlight that IC unit shipments (ex-memory) remain 2.8% below long-term shipment trends and historically we have not seen SOX correction until IC unit shipments exceed trend," he writes in a research note.



Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.