Chipmaker says glut in market will bring global slowdown
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LONDON (CBS.MW) - Growth in global chip sales is likely to halve in 2005, Samsung Electronics said on Monday, according to reports.
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The chip maker grew too quickly and couldn't keep up with customer demand, the company's CEO told an audience of investors, saying the company 'let down' its channel partners.
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No. 1 chipmaker Intel (INTC) on Thursday dramatically lowered its revenue estimates for the current quarter, a sign that the tech industry&#39;s rebound may be slowing.
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Singapore/Taipei, September 6: The world&#39;s top contract chip makers are not yet feeling the slowdown in demand that led Intel Corp to cut its third-quarter forecasts, but analysts say the relief may be just temporary.
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Advanced Micro Devices' move to cut overhead costs by outsourcing its chip manufacturing business may backfire in the long run, according to several analysts who have downgraded the company's stock.
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Although computer memory chip prices are expected to slide by midyear as chip makers plow money back into new production lines, analysts expect prices to stabilize later this year.
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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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The world's largest chipmaker posted a whopping profit but investors concerns centered around lower-than-expected sales.
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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 chipmaker's warning raises concerns about the flash memory business, one financial analyst says in a report.
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The maker of analog microchips said Tuesday its  fourth-quarter revenue would miss earlier targets because of  weak demand from computing and communications equipment makers.
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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.
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The chipmaker says its revenue for the ongoing quarter will be $8.3 billion to $8.6 billion, down from the previous estimate of $8.
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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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Chip maker plans for smaller, faster, less power-hungry processors.
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The top executive at Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world&#39;s biggest contract chipmaker, offered a mixed message Thursday about prospects for the global chip industry in 2008.Speaking at the company&#39;s third quarter investor conference, President and CEO Rick Tsai predicted that the chip industry will strengthen in 2008, but he also said TSMC will spend &quot;significantly less&quot; on new plants and equipment next year.TSMC announced net sales of NT$88.96 billion&#160;(US$2.73 billion) for the July to September period, up nearly 8 percent over the same time last year. Its net profit fell 6.5 percent to NT$30.37 billion, nearly in line with analyst&#39;s expectations.&quot;The third quarter was better than expected, not just for TSMC, but for the whole electronics industry,&quot; Tsai said. Sales of chips to the PC sector, mobile phone segment and consumer electronics products group were all brisk, he said.But many analysts considered TSMC&#39;s forecast to be more important than its third-quarter results. That&#39;s because of&#160;uncertainty about economic growth in the U.S.&#160;due to the housing loan problems there, high oil prices, and other troubles that could ultimately impact spending on electronics.TSMC is considered a&#160;bellwether for the tech industry&#160;because of the wide range of chips it manufactures, which end up in products including Xbox 360s, iPhones, PCs, and automobiles.&quot;We&#39;re expecting 2008 to be a better year than 2007 for the semiconductor industry,&quot; Tsai said. The chip industry will grow by a mid-to-high single digit percentage in 2008, the company forecast, compared to expected growth of 4 percent in 2007.Despite the rosy outlook, TSMC will reduce its 2008 capital spending from the expected US$2.6 billion in 2007. Spending cuts often indicate that a company isn&#39;t very bullish about business prospects, but TSMC said it wants to reduce spending next year because it spent heavily on production lines in 2007 that won&#39;t begin producing chips until next year.The change in spending plans is significant, said Eric Chen, research director at BNP Paribas Securities (Taiwan). If TSMC&#39;s capital spending drops by about 30 percent, as many analysts have predicted, it won&#39;t be a surprise, he said. But if the company reduces spending by a lot more, it suggests that TSMC may be more concerned about future economic growth than it is letting on.Tsai said TSMC hasn&#39;t determined a specific figure yet for its 2008 capital spending.BNP believes Europe and the U.S. may both face slowing economic growth next year.
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MAKUHARI, Japan  - Global chip equipment sales are  expected to fall 5.15 percent in 2005, an industry group said  on Wednesday in a sharp reversal from its July forecast of  growth of 23.98 percent.