Gartner: Chip revenue to see steady growth
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At the same time, an increase in inventory is making chip vendors and distributors worried.
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Global revenue from server sales climbed to $11.5 billion in the second quarter, according to new data from Gartner. This represents a 7.7 percent revenue increase over the same period last year, the market researcher said Wednesday.
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Gartner analyst Martin Reynolds said Intel, as the market leader, needs to keep &quot;moving people down the path&quot; of new technologies.
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Global semiconductor revenue is on track to post a lower-than-expected gain in 2004, following a sudden downturn during the closing months of the year, according to Gartner.
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But chip production costs won't fall as much as planned
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Ziff Davis - According to Gartner, worldwide server revenue increased in the second quarter by 7.7 percent over the year-ago period,  and server shipments jumped 24.5 percent.
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(InfoWorld) - News coming out the chip sector has been great so far this week, but analysts warn that economic woes such as the housing mess might still spoil the party. The consensus among analysts appears to be that corporate and personal spending on technology products will be hurt by the housing issues in the U.S., but nobody knows how bad the impact will be, according to Peter Sutton, head of research at CLSA Asia-Pacific Markets in Taipei. Demand for technology products, especially computers and mobile phones, in the rest of the world is going strong, he said, but even that demand could pull back in the event of a U.S. slowdown because many developing countries depend on exports to the U.S. for income. By the end of this year, people should know how bad the loan and home foreclosure situation will be, according to Sutton. The housing market in the U.S., he said, is expected to bottom in the first quarter of next year. The fear is that the housing issues could hurt consumer spending at some point later this year, but so far the technology industry isn't showing any signs of trouble. The flow of good news started in Asia on Monday with the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co. (TSMC), reporting record high sales in August and revising up its third quarter financial guidance. The company, considered a bellwether for the overall tech industry because of the variety of gadgets it makes chips for, said consolidated sales in August rose 10 percent year-over-year to NT$30.02 billion (US$907.0 million), beating its previous record of NT$27.96 billion from July of last year. TSMC also predicted its third quarter revenue will likely hit between NT$87 billion to NT$89 billion, higher than a previous forecast of NT$85 billion to NT$87 billion, and said its gross margin would come out at the top end of expectations. Some customers asked TSMC to ship some chips earlier than expected, a spokesman for the company said, but the company won't comment on how that might impact the fourth quarter. Taiwanese chip designer MediaTek followed up TSMC's news, announcing an agreement to buy certain telecommunications chips products from Analog Devices Inc., of Norwood, Massachusetts, for US$350 million in cash. The deal itself isn't huge, but merger and acquisition activity normally takes place when companies see bright prospects for the future, and MediaTek is looking to use the acquisition as part of its mobile phone chip strategy. Among the products the company acquired is a chipset used in TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) basebands and radio receiver products, which will help it increase its presence in its main market, China. TD-SCDMA is the 3G (third-generation) telecommunications standard being pursued in China. Positive corporate news for chip makers didn't stop in Asia. As the work day opened in the U.S., technology industry watchers were treated to theÂ long-awaited launch of Barcelona, the new quad-core processors from Advanced Micro Devices. The Sunnyvale, California company announced a number of companies are already using the chips, including IBM, Sun Microsystems, Dell, and Gateway. The world's largest chip maker capped Monday with the biggest news of the day.Â Intel raised its third quarter revenue forecastÂ to between US$9.4 billion and US$9.8 billion from a previous range of US$9.0 billion and US$9.6 billion, and said its gross margin would be at the upper end of guidance due to stronger than expected global demand for computing products. Despite the strong chip news and outlook for the current quarter, which ends Sept. 30, the future remains uncertain. "Near term data shows little evidence of order cutbacks in the tech supply chain," said Warren Lau, chip analyst at Macquarie Research Equities. "But having said that, the question remains: will the sky come crashing down because of the meltdown in the U.S. subprime markets?"
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Steady but unspectacular growth might leave investors wanting a bit more kick.
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(InfoWorld) - Contract chip makers will have a worse time than expected this year, market researcher Gartner said Monday as it revised down its revenue growth target for 2007 to 5.1 percent. A weak first quarter hit the industry harder than expected as growth declined 12.5 percent compared to the previous quarter. Although a recovery for the industry is underway, revenue growth will be far worse than the 16.7 percent growth the industry achieved last year, Gartner said in a report. Next year will be a boom year for contract chip makers, but the market researcher did not provide a firm prediction. Part of the first quarter drop was normal for the time of year. Holiday shoppers tend to take a breather in the first three months of the year, so sales of a number of electronics typically fall. But contract chip makers have also faced a chip glut, which caused some companies to reduce orders. Chip shipments by contract makers fell by around 3.8 percent sequentially in the first quarter, Gartner said, while average selling prices slumped about 9 percent. Fewer high-end chips, which command higher prices, were ordered during the quarter. The market researcher said the weak quarter marked a bottom for the industry. Chip makers have largely agreed. The world's largest contract chip maker, TSMC (Taiwan Semiconductor Manufacturing Co.),Â posted its worst quarter in nearly two years in the first quarter. But it said the industry bottomed out during the quarter and will improve as the year goes on because demand is improving and the chip glut has eased. The company's top rival, United Microelectronics also called the first quarter the low point for the year. "Following two consecutive quarters of decline, we estimate that the foundry market will grow 11.9 percent sequentially in the second quarter of 2007, mainly because of inventory replenishment and a better pricing environment," said Gartner. The communications segment is leading the recovery, while demand for consumer electronics is also reviving, the market researcher added. Last year, TSMC, which founded the contract chip-manufacturing or foundry industry in 1987, took a 45.2 percent share of the contract chip market with revenue of $9.7 billion, according to Gartner. Chip industry revenue totalled almost $260 billion last year, while the contract manufacturing segment accounted for $21.5 billion of that figure.
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The worldwide server market continued to expand in the second quarter, analyst firm IDC said in a report Friday that mirrored findings by Gartner Inc.
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Worldwide semiconductor revenue is forecast to reach 226 billion US dollars in 2004, a 27.4 percent increase from 2003 revenues, according to the latest quarterly update released Tuesday by Gartner.
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The market for semiconductor  equipment is expected to contract by almost 10 percent in 2008  largely due to lower spending from makers of computer memory,  market research firm Gartner said in a statement on Thursday.
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Texas Instruments Inc. TXN.N, the  world's largest maker of chips for cell phones, on Tuesday said  it expects fourth-quarter revenue and earnings per share at the  mid range of its previous estimates, as order trends remain  soft.
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High-end chip likely will stay a step ahead of competitors in the multicore processor race. Also, the chip design could be done this year.
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The PC market won't grow as fast in 2004 as originally predicted by Gartner Inc. analysts, as concerns about the overall health of the U.S. economy weigh on the market, the market research company said Monday.
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Gartner says 2004 is likely to be one of the best years for the semiconductor capital gear market, but next year isn't looking quite so hot.
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Global semiconductor sales next year are expected to total $215.3 billion, up just 1.2% from this year, according to a forecast released this week by an industry group that tracks global chip sales.