Here is today's input from Credit Suisse on the SIA report
<<August Month SIA Analysis
¦ August 2007 SIA Data Above Seasonal. SIA data (a lagging indicator) released over the weekend showed August industry revenue up 6.2% m/m (on a single month basis), 2.6 points above the seasonal average of up 3.6% m/m. August revenue marks the third consecutive month of above seasonal results. The revenue increase of 6.2% m/m was a function of higher units (up 4.6% m/m and better than normal seasonal of down 2.3% m/m) and better ASPs (up 1.4% m/m but worse than normal seasonal of up 6.1% m/m).
¦ 3Q Tracking Above Normal Seasonal. Notwithstanding continued concerns about the end-demand environment, 3Q company guidance, positive preannouncements thus far (INTC, ISIL, MPWR, QCOM, DIOD, XLNX), together with data points from the semiconductor supply chain post 2Q earnings, suggests that 3Q results will be better than normal seasonal. SIA data for the month of August also reinforces this notion – assuming that semiconductor revenue for the month of September is in-line with the normal seasonal trend (+20.3% m/m) semiconductor revenue growth for 3Q will be +13.1% q/q, versus normal seasonal (1985-2006) of +4.4% q/q. We think this trend of better than seasonal revenue growth is likely to continue into 4Q as well, where normal seasonality suggests growth of +3.9% q/q. Lastly, for our coverage universe we note that consensus estimates for 3Q are for revenue growth of +7.9% q/q, versus normal seasonal of +5.5% q/q.
¦ Focus Names. In an environment underscored by concerns about end-demand, we continue to recommend that investors focus on high-quality names with product cycles, margin expansion opportunities and near-to-intermediate term catalysts – in this context we highlight INTC, TXN and MXIM as our top picks.>> |
