SIA: March chips sales showed sequential improvement
5/2/2012 10:40 AM EDT
SAN FRANCISCO—The three month-rolling average of global chip sales improved to $23.3 billion in March, up 1.5 percent from February but down 7.9 percent compared with March 2011, according to the Semiconductor Industry Association (SIA) trade group.
For the first quarter of the year, chip sales totaled $69.9 billion, down 7.9 percent compared to the first quarter of last year, according to SIA, which bases its reports on data gathered by the World Semiconductor Trade Statistics (WSTS) organization. First quarter chip sales were down 2.2 percent compared with the fourth quarter of 2011, SIA said.
"We are encouraged to see that sequential growth resumed across all regions, especially in Europe and Japan, in March," said Brian Toohey, SIA president, in a statement. "We look for seasonal moderate growth to continue in the second quarter and build momentum as 2012 progresses. However, while forecasts for global economic growth are improving, macroeconomic and geopolitical uncertainties remain."
Chip sales in Europe and Japan improved sequentially by 3.8 percent and 1.2 percent, respectively, SIA said. SIA cited improving macroeconomic conditions, increasing semiconductor content across a wide range of applications and supply chain recovery related to the 2011 Thailand floods as drivers of an improved outlook for the industry.
According to Christopher Danely, an analyst with JP Morgan, SIA's March figures show the single-month total of sales for March was $26.4 billion, up 20.1 percent from February. The month-to-month improvement was below the seasonal average from February to March of 24.1 percent due to below normal sales of analog and flash memory chips, Danely said.
"We continue to expect lead times to extend over the summer as orders improve," Danely said, in a report circulated Wednesday. He added that the firm continues to remain positive on the semiconductor stocks and stocks that JP Morgan has rated as "overweight," including Texas Instruments Inc., Xilinx Inc., Analog Devices Inc. and On Semiconductor Corp.
Danely said JP Morgan analysts now believe the semiconductor industry is in "phase 4" of an upturn, with most semiconductor companies raising their June quarter guidance due to improvement in orders. Consensus analysts' estimates for many chip companies have also improved, Danely noted. "Book to bill is above parity for almost every semiconductor company, and 2Q12 appears headed for seasonal to above-seasonal growth in most areas," Danely said.
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