The positive sentiment was given a further boost after SEMI, the global industry association serving the manufacturing supply chains for the microelectronic, display and photovoltaic industries, projected 2010 semiconductor equipment sales to reach US$32.5 billion (RM104 billion).
JCY International Bhd and Green Packet Bhd put on two sen each to RM1,52 and 94.5 sen, respectively; while Notion Vtec Bhd added one sen to RM3. AIC Corporation Bhd was 2.5 sen higher at 65 sen while Heitech Padu Bhd rose one sen to RM1.10.
According to the mid-year edition of the SEMI Capital Equipment Forecast released on Tuesday, following a 46% market decline in 2009, the equipment market will expand by 104% in 2010 and experience annual growth of about 9% in 2011.
SEMI president and CEO Stanley T Myers said semiconductor equipment manufacturers were responding to a sharp increase in spending following two years of steep, double-digit declines.
“The moderate growth currently forecasted for 2011 is dependent on how the broader economy performs over the next six months or so,” he said.
Wafer processing equipment, the largest product segment by dollar value, is expected to increase 107% in 2010 to US$24.46 billion.
The forecast predicts that the market for assembly and packaging equipment will grow by 109% to US$2.95 billion in 2010. The market for semiconductor test equipment is also forecasted to grow by more than 100% to reach US$3.23 billion this year.
Growth is expected for all regions in 2010, with Taiwan being the largest market for equipment spending followed by South Korea. North America will be the third-largest market in overall spending on semiconductor equipment. China and the rest of the world will experience growth rates over 100%.
MIDF Research said the sharp spike in 2010 was a foregone conclusion given that the rise was from a low base stemming from the impact of the global recession in 2009.
“Moreover, the gains seen in 1H10 were largely driven by demand for consumer electronics leading towards the FIFA World Cup. Hence, it is highly unlikely that the sector will experience a similar growth rate in 2H10.
“Going forward, SEMI’s forecast for 2011 indicates a paltry 9% on-year growth after an expected 104% on-year growth in 2010. This, in our view, reflects the imminent slowdown in the space post 2010,” it said.
Inter-Pacific Research head Anthony Dass expects the strong positive growth in 1H10 to ease in 2H10 mainly due to the tapering of the low-base effect.
“In 1H09, sales dropped by 26% year-on-year and 2H09 was down only 0.8%; slower global growth was projected for CY10 of 3.2% as opposed to the earlier projection of 4.4%, implying inventory build-up could moderate.
“We continue to reiterate our semiconductor sales growth of 27.5% for CY10 and 1.5% for CY11,” he said.
Meanwhile, AmResearch reaffirmed its overweight recommendation on the semiconductor sector and reiterated its buy calls on MPI and Unisem.
It also said manufacturing margins had been consistently expanding at between two and four percentage points in the last three quarters.
“We expect this to continue well until year-end, at the very least. Thus, operating margins should remain high. The current margin for Taiwanese companies is 11.5%- 15%, comparable to Unisem and MPI’s margin of between 11% and 13.9%,” it said.
AmResearch said Intel’s 2Q10 sent a very positive signal for Unisem and MPI to chart a similar pattern. It expects Intel’s result being repeated throughout the industry, stemming from both strong demand as well as prices.
“We affirm our buy on MPI (fair value of RM8.90, 1.7 times price-to-book) and Unisem (RM3.80, 1.9 times PB). Our valuation is still below peak boom time 2.3 times price-to-book observed in 2004-2005. Unisem stands to exploit more from constraints as its China operation would be coming onstream as early as end of 3Q10,” it said.
This article appeared in The Edge Financial Daily, July 15, 2010.
No comments:
Post a Comment