Semiconductor Sector Poised to Rebound? (May 2012)
According to the Semiconductor Industry Association (SIA), despite an annual decline of 7.9% in March, global chip sales increased 1.5% MoM to USD23.0bn as sequential growth resumed across all regions, especially in Europe and Japan. SIA expects seasonal moderate growth to continue in the 2Q and build momentum as 2012 progresses. While there may be concerns on the sector’s outlook due to the EU’s descent into a recession and China’s economic slowdown, it was believe that the growth momentum of the semiconductor market is sustainable . In our view, the EU’s decline will be offset by the recovery in the US while chip demand from China should remain resilient, driven by the tech hungry consumers and the proliferation of the IT market. Outlook for local players Management of most companies under our coverage has turned more optimistic about the coming quarter as customers raised orders in March. Analysts do foresee some stability, although the ...