Gartner, SIA warn of possible chip slowdown
559558
(InfoWorld) - A major semiconductor industry group warned that an economic slowdown could crimp sales of chips used in consumer devices, while GartnerÂ on Sunday said a global chip glut is worsening. Despite recording a fourth consecutiveÂ record high level of monthly chip salesÂ in October of $21.9 billion, the Semiconductor Industry Association (SIA) warned that greater dependance on sales of consumer electronics devices such as MP3 music players and digital cameras means the chip industry could face a downturn if an economic slowdown occurs. The global industry group said recent signs of such an economic slowdown could foretell slower chip growth in coming months. Sales for now, however, remain brisk ahead of the holiday season, the SIA said, with 9.2 percent growth in October compared to the same time last year. Sales were strongest to Europe. Market researcher GartnerÂ said production lines are churning out fewer chips than they could, and that the slowdown reflects an increase in inventory levels similar to 2004, when a glut caused a downturn in the industry. Specifically, global factory utilization rates, which measure the amount of chips a factory churns out compared to its total capacity, dropped to 88.6 percent in the third quarter from 91.2 percent in the second quarter, while in advanced, 12-inch (300 millimeter) factories, utilization rates fell to 87.9 percent in the third quarter, the lowest level since the fourth quarter of 2004, when the rate bottomed at 87.3 percent, Gartner says. "So, it is looking more and more as though 2006 is repeating the inventory increase/production cutbacks seen in 2004," wrote Gartner analyst Bob Johnson in a report. He predicts that companies will slow down on factory expansion going into 2007.
321800
However, the Gartner Dataquest Semiconductor Inventory Index showed inventories in the supply chain at the low end of the &quot;caution&quot; zone.
587192
Chip maker says it will use methods other than clock speed to improve processor performance.
748762
Buyers are waiting for quad-core machines and need fewer servers in general, in part because of virtualization, Gartner says.
224138
Semiconductor stocks were mixed Tuesday after Advanced Micro Devices Inc. warned quarterly revenue would be lower than expected due to sluggish sales of flash memory chips used in mobile phones and other devices.
388687
A chipset promising to allow users to send high definition (HD) video wirelessly throughout the home faces hurdles in the market due to competing technology standards, market researcher Gartner Inc. said Monday.
504254
At the same time, an increase in inventory is making chip vendors and distributors worried.
134770
The Semiconductor Industry Association (SIA) yesterday scaled back its forecast for this year&#39;s semiconductor sales, after demand slowed though July, August and September.
768988
Companies will use strained silicon to boost transistor speed.
472137
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¦
176585
Advanced Micro Devices Inc. , the No. 2 microprocessor maker, warned on Monday that it will likely miss its quarterly revenue target as it loses market share among computer resellers, a traditional bulwark of its business.
580900
(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.
730504
The chip maker now expects revenue of between $8.3 billion and $8.6 billion due to lower-than-expected worldwide demand for its processors as well as "customer reductions in component inventory levels."
212858
Company denies the chip has been delayed, but many had expected it sooner.
629068
Signaling a possible wider slowdown in the semiconductor industry, Royal Philips Electronics on Friday became the latest company to say that its chip sales had begun to stall, at least temporarily.
700500
With Christmas just 11 days away, you have to wonder what Hector Ruiz is going to find under his tree. It&#8217;s been a terrible year for Advanced Micro Devices, and the chipmaker&#8217;s analysts conference on Thursday did nothing to spread holiday cheer.Confirming what many in the chip world had suspected for some time, CEO Ruiz and other AMD execs fessed up that bugs in its new quad-core Barcelona server and Phenom desktop chips will&#160;delay these key next-generation technologies.The technical problems will delay general availability of the fastest version of the chips for three or four months. Customers willing to settle for slower clock speeds will be able to get the processors sooner; for example, AMD will ship a 2 gigahertz version of the Barcelona first, instead of the expected 2.5 gigahertz speed. In either case, the chips will be close to a year late; the original target date was the first quarter of 2007.AMD STUMBLES AS INTEL SPEEDS AHEADThe problem couldn&#8217;t come at a worse time. AMD has struggled all year to close the performance gap between its high-end chips and Intel&#8217;s. Barcelona, the company had promised, would restore its technical supremacy. Indeed some analysts said they had expected the quad-core server chip to do just that. &#8220;At 2.5 gigahertz it would have beaten any Intel products,&#8221; said analyst Nathan Brookwood of Insight64. &#8220;But at 2 gigahertz, it&#8217;s bringing up the rear,&#8221; he said.Intel, meanwhile, has corrected many of the problems that dogged it earlier in the decade. &#8220;AMD isn&#8217;t competing against the Intel of two years ago,&#8221; said Dean McCarron of Mercury Research. Intel has had quad-core chips in the market for about a year. To be fair, its chips are based on a somewhat simpler design; Intel gets to four cores by packaging two dual-core chips together. By contrast, AMD&#8217;s design integrates four cores on one chip, a more efficient solution, said McCarron. Except that AMD&#8217;s approach reduces yields and thus raises manufacturing costs, he added.There was earlier speculation that Barcelona&#8217;s problems were related to the ATI graphics chipset, but the problem turns out to be deeper, at the chip level. AMD has said it is related to the translation lookaside buffer (TLB) in the processor&#39;s L3 cache.DOUBTS ABOUT A QUICK FIXIn the Thursday conference, analysts had expected discussion of the company&#8217;s &#8220;asset light strategy,&#8221; which will apparently entail outsourcing more manufacturing to foundries such as Chartered Semiconductor or TSMC. But they didn&#8217;t get it, and the lack of details made CEO Ruiz&#8217;s promise to return to profitability in 2008 less credible to Wall Street. AMD&#8217;s financial performance has been terrible, losing money for four straight quarters. Part of the reason: Intel and AMD have engaged in a bloody price war, a struggle that has been very tough on the smaller company&#8217;s profit margins. But the Barcelona and Phenom delays are serious self-inflicted wounds.AMD&#8217;s stock lost another few points yesterday and has now shed about 40% in the last two months and a bone-jarring 56% since the beginning of the year. At $8.84 a share, Thursday&#8217;s closing price, the stock is at its lowest ebb since the summer of 2003. Ironically, AMD has so far&#160;rewarded Ruiz with pay raises.
540831
The semiconductor industry will consolidate, with nearly 40 percent of today&#39;s chip vendors disappearing over the next few years, market researcher Gartner said in a forecast released this week.