Overall Market
Handsets Good, Analog Not so Good — Handset related components fell 110bps in
January, less than the normal seasonal rate of decline. Moreover, versus one
quarter ago, January handset chip sales showed y/y growth acceleration,
consistent with the outlook from Texas Instruments calling for y/y acceleration in
their wireless handset related sales. However, industry analog sales are tracking
136bps below normal seasonal for 1Q08, leading us to maintain our below midpoint
forecast for TXN’s 1Q08.
Handset Starts Strongly, but Analog Weak. Handset related components
fell 110bps in January, less than the normal seasonal rate of decline.
Moreover, versus one quarter ago, January handset chip sales showed y/y
growth acceleration (+30% versus +24%), consistent with the outlook from
Texas Instruments calling for y/y acceleration in their wireless handset related
sales (+9% in 4Q07, +12% in 1Q08). While this is better than our expectations
(as also suggested in our 2/19/08 note), we point out that industry analog sales
declined 270bps worse than seasonal in January. Normal seasonal progress in
February and March, already a risky proposition, would result in a 136bps
growth shortfall for 1Q08 versus the 10-year median. |
