Semiconductor Sales May Have Slid 15% in 4th Quarter (Update2)
1/9/1 18:2 (New York)
Semiconductor Sales May Have Slid 15% in 4th Quarter (Update2)
(Adds analyst comment starting in second section.)
Pebble Beach, California, Jan. 9 (Bloomberg) -- Global
semiconductor sales may have fallen about 15 percent in the fourth
quarter from the previous period, and chip-equipment sales may drop
as much as 6 percent this year, researcher Dataquest Inc. said.
The December period ``was a pretty poor quarter for chip
companies,'' Dataquest analyst Klaus-Deiter Rinnen said. ``We
could see some disappointing earnings announcements there.''
Rinnen didn't name any specific chipmakers that may miss
targets. No. 1 computer-chip maker Intel Corp., rival Advanced
Micro Devices Inc., communications-chip makers Altera Corp. and
Xilinx Inc. and others already have said sales would miss their
original forecasts as economic growth slowed.
The first quarter could be tough as well, the market-research
firm said. Dataquest now expects sales to fall 6 percent in the
March period from the fourth quarter, compared with the 3 percent
to 4 percent decline typically seen, as chip demand slips and
customers work through excess inventory.
The outlook for computer and chip companies has become cloudy
as executives and analysts try to gauge how long the economic
slowdown will last. Though Dataquest has called for 11 percent
growth in chip-equipment sales this year, Rinnen said that in the
worst-case economic scenario, sales of such tools may fall.
``Don't expect a pop, a snapping back (in the economy),''
Rinnen said at a Semiconductor Equipment and Materials
International conference in Pebble Beach, California. ``It's going
to be slow growth.''
Still, he said a recession is less likely now, after the
Federal Reserve cut interest rates last week.
Wild Ride
Chipmakers and their manufacturing-equipment suppliers faced
an odd mix of market conditions last year.
For the first six months, the pace was frenetic as Intel and
others couldn't build enough chips to meet demand, and toolmakers
such as Applied Materials Inc. rushed to ship all the systems they
could. Then the bottom dropped out as demand for computers and
cell phones slowed, leading to order cancellations and missed
sales goals.
``The global trends are in the midst of reversing course,''
IC Insights Inc. President Bill McClean said during a conference
discussion broadcast over the Web.
It's going to take time for the market to rebound, analysts
said. Chip sales will rise just 5 percent this year, compared with
previous estimates of 11 percent, VLSI Research Inc. President Dan
Hutcheson said.
That means chip-equipment sales will increase just half a
percent this year, he said. That's after almost 90 percent growth
predicted for 2000.
``It was a pretty wild ride, and it was pretty amazing that
the equipment industry met that,'' Hutcheson said.
Extended Fall
As investors try to peg how hard the economy will land,
Dataquest said to watch how fast extra chip inventory dries up,
when equipment orders begin to grow and whether chipmakers start
spending more on new plants.
Some of the researcher's possible indicators for a so-called
soft landing: personal-computer unit sales growth of 16 percent to
18 percent in the first half of the year, tightening chip-
production capacity by midyear and rising equipment orders
starting in the second quarter.
Still, it could take quite a while for equipment makers to
see the benefits of a rebound in chip demand.
``The second year after a peak in spending is usually the
worst,'' McClean said.
(A replay of the Pebble Beach discussion is available at
www.streetfusion.com.)
--Cesca Antonelli in the San Francisco newsroom (415) 743-3532, or
at fantonelli@bloomberg.net/jac
Story illustration: For a graph of the Philadelphia Semiconductor
Index over the past year, see {SOX <Index> GP D <GO>}.
Companies:
AMAT US <Equity> CN
NVLS US <Equity> CN
KLAC US <Equity> CN
LRCX US <Equity> CN
TER US <Equity> CN
INTC US <Equity> CN
AMD US <Equity> CN
TXN US <Equity> CN
ALTR US <Equity> CN
XLNX US <Equity> CN
NI codes:
NI SEM
NI SEQ
NI ELE
NI TEC
NI CPR
NI NET
NI WRLS
NI COS
NI US
NI CA
NI SHOW
NI EST
NI INDSTATS
-0- (BN ) Jan/09/2001 23:02 GMT |
