June data shows microchip sales rebound


  • Business
  • Wednesday, 06 Aug 2003

BY PAULINE S.C. NG

WORLDWIDE sales of semiconductors amounted to US$12.54bil in June, marginally above the US$12.49bil recorded in May, but still the 12th consecutive month of positive year-on-year growth. On a year-on-year basis, global sales grew by 10% in June. 

The US-based Semiconductor Industry Association (SIA), in a release at the weekend, said second-quarter sales rose 3.2% to US$37.6bil from US$36.4bil in the first quarter. It was 10.4% higher than the US$34.1bil posted in the second quarter of 2002. 

Information technology (IT) analysts agree chip sales appear to be on a rebound. 

In its daily note, OSK Research said the June data was solid evidence that the semiconductor industry was indeed in a recovery phase. 

“We expect sales worldwide to be stronger in the second half due to year-end festive sales and low inventories in the industry. 

“In view of that, we maintain our 'Buy' recommendation for the semiconductor sector,” said the research house, which has a 'Buy' on Pentamaster Corp Bhd, 'Neutral' on Unisem (M) Bhd and a 'Sell' on Malaysian Pacific Industries Bhd. 

SIA president George Scalise noted: “As predicted, the recovery is broad-based and is now beginning to draw strength from computation, the largest end-market for semiconductors, as well as the global consumer and communications sectors.” 

Capacity utilisation on the leading edge had reached 96% and excess inventory in the supply chain was now at negligible levels, with very few exceptions, he added. 

This could be seen in the figures for the quarter ending June where sales of computers on a unit basis rose almost 8% year-on-year – representing the strongest growth since 2000 – and supporting an 8.2% expansion in microprocessors. 

There was also strong demand for broadband services; and brisk sales of digital video discs (DVDs) and digital cameras resulted in an increase of almost 40% in optoelectronics – flash memory used in these products and in mobile phones was up about 37% year-on-year. 

“Now that the inventory has been worked off,” said Scalise, “increasing demand as the year progresses will directly generate rising semiconductor sales.” 

A local IT player commented that some sectors were doing a bit better than others. Locally, semi-con activities were a bit more pronounced now, he said, but felt it would take another quarter or so to kick in. 

“Hardware is also picking up a little but software and services are more limited,” he said, adding that overseas markets, particularly the US and Europe, seemed to be holding on to spending. 

For the June quarter, SIA said, semi-con sales in Japan rose 5.3% on a quarter-on-quarter basis, in Asia Pacific 5.9%, and in the Americas 3.6%. 

In Europe, sales declined 4.1% due to sluggish economic growth and outsourcing of production to Asia. 

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