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Ready for 3Q10 Reviews? The ups and downs are coming in

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Depending on your specific market sector, the third quarter of 2010 (3Q10) held quite different experiences, so the early reports are confirming.

We know much of this already, of course, as we've all been watching what has felt like a marathon ping-pong tournament.  Most indicators have been showing a slow-down in demand from both consumer and corporate markets.  However, some subsectors are chugging along, notably tablets and smartphones.  This group happens to represent the new, 'cool', SWD crowd, to be more precise (cf. our recent post here delving into the smart wireless devices (SWD)).

 

Considering the data from WSTS, as provided in this week's release of the SIA August Month-on-Month (MoM) global chip sales report here, we see that the forward momentum is holding, albeit 'just so' across the board for MoM sales comparisons.  Of course, the year-over-year (YoY) numbers are notably higher, but that is due to a comparison from the residual effects of last year's financial crisis (cf. WSJ.com’s commentary on the SIA data here).  The averaged percentile change for the global semi chip sales is +1.8%, with the breakdown as follows:

 

Americas          2.0%

Europe             0.1%

Japan               4.1%

Asia Pacific      1.4%

While these numbers do underscore that critical positive position, there is considerable room for speculation since the September sales are not included and many of the chip giants (esp. Intel and AMD) have notably revised forecasts downward for 4Q and have been warning of slow-downs.

Some companies are seeing good growth in DRAM, such as Inotera Memories, who recently reported 12.2% MoM and 10% YoY sequential revenue growth for September 2010, as reported by DigiTimes 10/05/10.  Inotera is looking at doubling it's new 50nm wafer starts to reach 100,000 in October (up from 50,000 units this Summer).  Conflicting news comes from Nanya Technologies who saw revenued drom 13% MoM for the same time period.

Then there is the scale-down in architectures and bullish movement by the larger memory chip makers.  Samsung announced in late September the move to mass producing 40nm-class 8GB DDR3 (cf. Samsung's press release here, and this commentary on it by ElectroIQ here).  Hynix Semiconductor, similarly zeroed in on this sub-sector and has been ramping up its smaller architectures for both DRAM (at 44nm and 38nm scales) and down to 20nm NAND flash products (cf. this report in the Korea IT Times).

What do we make of all this news?  In short, market sector matters.  The end products that are showing high(er) demand are the ones that are (obviously) supporting the demand for particular components.  With economic indicators showing slowing but continued momentum, and consumers and corporate buyers waffling somewhat on their purchases recently, by tracking the SWD market and the infrastructure demands from emerging economies, we can better begin to sift through all the reports.

For a synthesized analysis of the market movement for products and there related semi components, watch for the upcoming set of articles in our MarketWatch Quarterly, available mid-October with a free subscription, and available the end of October to the wider public.


Lisa Ann Cairns, Ph.D.
Written on Wednesday, 06 October 2010 10:51 by Lisa Ann Cairns, Ph.D.

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