This makes a different case, especially for US based chip stocks. Short term implications should see eps and revenue estimates easier to beat come mid-January:
abcnews.go.com
Weak Dollar Seen Magnifying Chip Recovery
Dec. 22 — SAN FRANCISCO (Reuters) - The weakening of the U.S. dollar has magnified reported sales growth in the semiconductor market, making the industry's recovery from its worst-ever slump appear significantly stronger than first thought, according to a report on Monday.
Revenues from sales of semiconductors, when converted into dollars, will rise 13.9 percent this year from the previous year, compared with a previous forecast of 9.8 percent, according to research firm iSuppli Corp. of El Segundo, California.
Only about 1 percentage point of the difference between the two forecasts reflects stronger-than-expected demand, while about another 3 percentage points reflects a currency effect, according to iSuppli.
The weakening of the dollar over the second half has raised the value of chip sales in currencies other than the dollar when they are converted in dollars, a trend seen continuing through the first half of 2004, said iSuppli analyst Dale Ford.
"Unless there is intervention to strengthen the dollar this will continue through the first half of next year," Ford said. "That's not in the cards for the foreseeable future."
The dollar is down about 5 percent against the euro and down about 10 percent against the yen, since the end of May. |
