- Tuesday, 10 November 2009
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The palest ink is better than the best memory - Chinese proverb
Semi stocks are looking up
THINGS ARE ON the rise and rise when it comes to PC and handset supply chains according to analysts, with companies like Intel, Texas Instruments, Qualcomm, Marvell, Intersil, Microchip, Fairchild, Infineon, Seagate, and Soitec, scurrying to revise their guidance for the second half of the year.
According to financial fortune-tellers, these positive pre-announcements are a sign that order activity has perked up as inventory restocking, which slowed a bit in May, takes advantage of summer clearance sales.
Analysts reckon the supply chain is now gearing up for a fashionably seasonal 2H09 which should, if the crystal ball readers are correct, drive positive order momentum for semiconductor makers through Q309.
Enterprise and industry are still lagging behind the trendier consumer space, however analysts reckon both segments will shape up within the coming months too. The reassuring news from Micron that server related DRAM demand has already rebounded strongly last month is a good indication.
Those in the financial know say the PC supply chain is well positioned for the third quarter, when order momentum should pick up ahead of the much hyped Windows 7 roll out and back-to-school shopping.
Intel's shipments are predicted to shoot up in the third quarter, with smaller rival AMD also due to see a similar trend and both chipmakers likely tracking ahead of plan in Q2 and this strength continuing into Q3.
While investors still appear cautious about shoving wads of their hard earned cash into the semiconductor stocks, especially with fears about excess inventories and weakening end demand in the second half of this year, analysts think these worries are unfounded.
Wall Street now appears to believe the fretting over excess inventory stockpiling is exaggerated and most financial types are feeling comfortable with Semi stocks for the near future. µ
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I think they better think it out again.
Even a dead horse will bounce if you drop it far enough.
The recent freeze up in consumer pocket money flows was IMHO< largely due to panic not-buying. Pockets are bound to unfreeze once people realise they have actually got money to spend and the bogey man is not living under the bed etc. Logically we can expect a return to less inhibited cash flow but not to pre-collapse levels which were over inflated globally by unrealistic lending and leveraging.
On the other hand we will begin to see the true extent of the damage done as a legacy of the bubble collapse.
Meanwhile we have moved on at least one product cycle. Inventory is competing with shiney which will drag prices and margins down and one potential response may be to slow the product cycle.
An interesting aspect of Win7 release is that it spikes the market with a definite due date for new silicon. It should be to the advantage of ATI with the promise of indubitably shiney DX11 products ready months before nVidia's. But will the early bird catch a wave of resurgent spending on shiney products or has nVidia got its tortoise-like timing right?
You could argue that the optimal timing is different for either company. ATI would get a better early response with their bang for buck cards than nVidia would with higher priced cards. Nvidia's pricey power-user products would be more likely to float in a later market.
Time will tell the difference between realism and wishful thinking.
Man, that was way too well-reasoned for an Inq comment. Are you sure you're on the right site? You're supposed to say "Apple sucks!" or "Linux sucks!" or "Microsoft sucks!". Get with the program.
Sorry disillusioned Inq reader. You are right, never let a Spock complex get in the way of a good mickey take. What I really meant to say was...
...lol if the suits are spouting peppy flimflam it must be bad.
Also I forgot to slag nVidia off for making cards with banana paste for underfill...
...missed an opportunity to call Win7 "MEII II"
...failed to point out MEII II was Vista SP3
...could have dwelt on the notion that DX11 is hyped to force an upgrade cycle
...I could have worked in a rant about .net and drivers but didnt
...couldve wondered how many mobile devices it would take to boil the water for a cappucino, but omitted even this simple skit
For these and all my sins I just want you to know I humbly don't give a toss.
TQVM, Ollie ;)