Chip sector sees trade slump in second half
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THE global semiconductor business slumped during the second half of the year - although overall 2004 brought a 23% increase in revenue in the industry amounting to $218bn (Â£112bn), according to analysts at researchers Gartner Dataquest yesterday.
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For China, it could reinvigorate a chip industry that has slowed over the past few years as major chip makers posted a string of money-losing quarters. It also represents a token of goodwill by Taiwan to political enemy China.
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Intel, the world's leading computer chip maker, slashes its revenue forecasts, triggering a decline in global chip stocks.
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Shares from Sydney to London sank for a second day on Tuesday, dragging commodity prices with them and promising similar falls for Wall Street as investors abandoned assets exposed to the risk of a global economic slowdown.
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Industry analysts have served notice that the double-digit growth of the PC industry is slowing, which has already had an effect on the growth rates of the chip industry, according to the Semiconductor Industry Association.
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Three more Taiwanese chip makers plan to&#160;spend significantly less money on new factories and equipment&#160;this year as a DRAM (dynamic RAM) glut and uncertainty about the global economy weigh.Lower capital spending forecasts in the chip industry are a sign the global IT industry is on edge about future demand. Analysts have expected DRAM makers to cut back on spending for a long time due to&#160;falling chip prices. Prices for mainstream DDR2 (double data rate, second generation) chips remain below production costs, and most DRAM makers have reported losses for the fourth quarter.Powerchip Semiconductor, Taiwan&#39;s largest memory chip maker, Wednesday said it plans to spend NT$35.1 billion (US$1.09 billion) on new chip factories, technology and production line equipment this year, less than half the NT$86.3 billion it spent last year.Powerchip&#39;s smaller rival on the island, ProMOS Technologies, also more than halved its projected 2008 capital spending to US$800 million, down from US$1.84 billion last year. The company also put the expansion of its fourth 12-inch factory on hold pending a rebound in the DRAM market.United Microelectronics (UMC), the world&#39;s second largest contract chip maker, forecast its 2008 capital spending at US$500 million to US$700 million, down from US$900 million last year.The company&#39;s customers have turned cautious due to global economic worries, said Jackson Hu, CEO of UMC, at an investors&#39; conference in Taipei on Wednesday. The company forecast its chip shipments will decline as much as 15 percent in the first quarter, compared to the fourth quarter of last year as chip demand weakens, particularly for communications chips.Global semiconductor equipment spending is forecast to fall 9.9 percent to US$40.3 billion this year, from US$44.8 billion last year, according to Gartner. The market researcher blamed over-investment by DRAM makers in 2007 for the cutback in semiconductor capital spending this year. Concerns about a U.S. economic recession have also put chip makers in a cautious mood, Gartner said in a report published early this month.&#160;
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Global semiconductor sales growth  slowed to 1 percent in August as electronics makers reacted to  growing inventories in Asia by limiting orders of chips, an  industry trade group said on Thursday.
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(InfoWorld) - Taiwan Semiconductor Manufacturing Co. Ltd., the world's largest contract chip maker, reported its worst monthly revenue in 20 months on Friday, but analysts applauded the figure as further proof that an industry glut is dissipating. TSMC said its revenue in February hit NT$20.58 billion (US$624.2 million), down 14.3 percent compared to last year and its worst monthly revenue figure since it reported revenue of NT$20.11 billion in June, 2005. Despite the poor showing, analysts said it was a strong figure considering February is a shorter work month, at only 28 days, and that a major holiday, the Lunar New Year, celebrated throughout Taiwan and much of Asia, also slowed work at TSMC factories. Last year, the Lunar New Year, which is usually a week-long holiday in Taiwan, was on Jan. 29. This year, the first day of the Year of the Pig fell on Feb. 18. "I think the February sales figure was fantastic. It was only down about 2 percent from January," said Warren Lau, chip industry analyst at Macquarie Securities Ltd. in Hong Kong. He said TSMC's February revenue was further proof that a chip glut that has hampered the industry for the past several months is nearing an end. But the return to health over the next few months could be specific to TSMC, and not include the wider chip industry. Earlier this week, Advanced Micro Devices Inc. (AMD) said it will miss its revenue goal for the first quarter of 2007, while rival Intel Corp. outlined plans to beat a microprocessor glut and weak corporate demand for PCs by stepping up chip development speeds. The two companies engaged in a price war last year, and continue to suffer as they duke it out in the market, analysts say. Gartner Inc. believes the chip industry won't start to recover from the glut until the second half of this year. Rising inventories in late 2006 caused companies to slow production and ease off on buying new machinery as a drop in orders idled more and more production lines, said David Christensen, a Gartner analyst, in a recent report. "Look for this trend to continue through the first half of 2007, followed by a slow recovery in the second half of the year," he wrote. Last month, the market researcher revised down its revenue growth estimate for the chip industry this year to 6.4 percent, from a previous forecast of 9.2 percent. Gartner estimates chip industry revenue will reach US$259.7 billion this year. Â
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LONDON, November 9  - The German semiconductor company, Infineon Technologies (IFX.ETR), has projected a downturn in the semiconductor industry next year, after reporting a 10% y/y decline in its profits for the fourth fiscal quarter.
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Blog: Bad: AMD lost $600 million in the second quarter. Good: Chip shipments surged.
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US technology shares tumbled on Friday after Intel Corp. , the world&#39;s No. 1 chip maker, slashed its revenue forecast, but blue chips were only moderately lower as drug and industrial stocks gained.
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NEW YORK  -Stocks fell in choppy trade on Wednesday, as pessimism about the U.S. economy mounted after Intel Corp , the world's largest chip maker, posted earnings and a profit forecast that disappointed investors.
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Analysts, though, viewed the revenue drop as a sign the chip industry's glut might be dropping.
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Talks of pesky recession ain't helping much either The semiconductor biz looks set for a bumpy start to the New Year with analysts downgrading worldwide spending and sales expectations amid oversupply woes, high energy costs, and credit crunch fears.â¦
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Korean chipmaker Samsung says a glut of semiconductors on the market will bring prices down and slow growth in 2005.
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By Alexis Xydias  European technology stocks, the worst performing industry sector since the market peaked in 2000, could take the lead if they avoid an earnings slump forecast for the region.
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US technology shares tumbled on Friday after technology bellwether Intel Corp. (INTC.O: Quote, Profile, Research) slashed its revenue forecast, but blue chips were only moderately lower as drug and industrial stocks made solid gains.