Smith Market Blog

No Where To Go But Up?


With 2Q09 numbers coming in, the data tracking the semi industry's health are proving the early forecasts of recovery on the horizon to be valid.  As cited by EETimes, the three month-moving average (3MMA) for global chip sales, while still down by 27 percent year-over-year (YoY), looks to be up by 3.4 percent from March to April 2009.

Forecasts for 2009 (Y09) global semiconductor revenue are similarly being revised upward, as Gartner upped their estimates by two percent from an earlier 24.1 percent decline to 22.4 percent, according to EETimes.  The downside to the news from Gartner is that the growth is based on successful inventory management and reductions triggering a recent rebuild state in the PC sector, rather than new demand.

However, IC Insights is echoing the positive trend for 2Q09, showing semiconductor suppliers with quarter-over-quarter sales increases averaging 9 percent, as reported by EDN.  

A model of Intel's 2Q09 offered in Seeking Alpha is also forecasting a five percent revenue increase QoQ for the industry bellweather, based on increases in March sales over February, coupled with an earlier statement by Paul Otellini, Intel President and CEO, "We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns."  (See also here in this Commentary space for an earlier reference to these forecasts by Intel and other analysts.)

Just for good measure, and to add more positive data to assuage even the most sceptical, the Semiconductor Industry Association (SIA) released its April 3MMA numbers showing "worldwide sales of semiconductors rose to $15.6 billion in April, 6.4 percent from March when sales were $14.7 billion [...]."  Again, inventory replenishment was offered as a driver of the improved sales numbers for April, but not a sole driver.  According to SIA President George Scalise, "Consensus forecasts currently project that PC unit sales in 2009 will decline by about 6 percent compared to earlier forecasts of a decline in the range of 12 percent.  Analysts are also more optimistic about cell phone unit sales, which are now projected to decline by around 7 percent compared to earlier forecasts of 15 percent." 

It looks like it's time to use the summer months wisely in preparation for what we all want, a healthy busy cycle ahead.

For a more visual data point, SIA also updated their chart tracking the YoY results since 1996 :

Lisa Ann Cairns, Ph.D.
Written on Tuesday, 02 June 2009 00:00 by Lisa Ann Cairns, Ph.D.

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