| KUALA LUMPUR: Global semiconductor sales for the second quarter of 2010 (2Q10) rose 7.1% to US$74.8 billion (RM238.6 billion) from US$69.9 billion in 1Q10, according to data from US-based Semiconductor Industry Association (SIA). Month-on-month, sales for June were up 0.5% to US$24.9 billion from US$24.8 billion in May, driven by sales in the Americas, which increased 4.3% during the period. Meanwhile, sales in Europe and Asia Pacific fell 1.2% and 0.5%, respectively. “Sales in the first half of 2010 were exceptionally robust, driven by strong demand from a broad range of end markets,” said SIA president Brian Toohey. “We expect that sequential growth rates will moderate in the coming months, with the result that year-on-year (y-o-y) growth for the industry will be in line with our mid-year forecast of 28.4%,” he said. In the first half of the year, worldwide sales amounted to US$144.6 billion, representing an increase of more than 50% y-o-y from US$96.1 billion previously, he added. In a statement, the SIA noted that the extraordinary y-o-y sales growth reflected not only strong demand from key end markets but also the effects of the industry slowdown in the first half of 2009. Toohey also expected macroeconomic factors such as consumer confidence, job growth and overall economic growth to continue as key indicators for their possible impact on sales in the second half. Local brokerage firm RHB Research Institute concurred with the view, saying in a research note that the “uninspiring US consumer data and the lingering euro debt crisis” had reduced the visibility of consumer electronics demand going forward. “In addition, a sharper-than-expected economic slowdown in China may also impact consumer demand,” it said, adding it maintained its neutral call on the semiconductor sector. RHB Research said global players like Taiwan Semiconductor Manufacturing Company Ltd (TSMC) had reported seeing its chip cycle peaking in 2Q10, having already released guidance for slower growth in 3Q10. The research house also highlighted potential earnings weakness in electronics giant Samsung, and lower-than-expected earnings for Western Digital, suggesting slowing demand for hard disk drives (HDD). However, CIMB Research was positive on the industry’s prospects. “The corporate replacement cycle is kicking in for the semiconductor industry. Also, demand in key end-user markets is still firm, helped by new product launches, and emerging markets are fuelling growth, becoming the largest buyer of chips globally,” it said in a July 26 report. This article appeared in The Edge Financial Daily, August 4, 2010.
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