Analyst: Signs point to recovery in ICs, not gear
Dylan McGrath
(05/05/2009 8:45 AM EDT)
URL: eetimes.com
SAN FRANCISCO—Many signs are pointing to a global recovery in the IC sector, but vendors of semiconductor manufacturing equipment are unlikely to experience an upswing before at least August, an analyst said Tuesday (May 5).
Robert Castellano, an analyst with market research firm The Information Network (New Tripoli, Pa.) noted several positive developments for chipmakers, including the Semiconductor Industry Association's statement last week that demand has "stabilized somewhat."
Castellano said Intel Corp. and Texas Instruments Inc. reported inventory has been worked off while Taiwan Semiconductor Manufacturing Co., the world's largest IC foundry, said last week forecast a rebound in second quarter sales and predicted that the second half of the year would be considerably better than the fist.
Despite positive economic news that continues to come from China, Castellano predicted that the U.S., not China, would lead the semiconductor industry out of recession. Evidence comes from positive activity in The Information Network's leading indicators in the U.S. semiconductor industry, he said.
"Both our long and short indicators turned up in late 2008, pointing to a business recovery cycle and giving visibility that the days of the recession are numbered," Castellano said in a statement.
Castellano said The Information Network's "coincident" indicator—which includes statistics such as gross domestic product, jobs, sales and income in the U.S. economy—is still negative. But leading indicators suggest it will soon turn up, probably in the third quarter, he said.
In the equipment segment, Castellano said The Information Network's global leading indicator has only just started turning up for many companies. This indicator historically correlates precisely with semiconductor equipment inflections five months out, he said. The firm does not anticipate an upturn in the equipment business until at least August.
Castellano noted the positive economic news continues to come from China, including a report that China's purchasing managers' index hit 53.5 in April, its second month above the 50 level and fifth successive monthly rise. Castellano said Goldman Sachs recently upgraded China's GDP growth from 6 percent to 8.3 percent and Morgan Stanley from 5.5 percent to 7 percent following a successful implementation of the $586 billion stimulus plan and bank loan growth of $680 billion in the first quarter.
But Castellano cited a report by BCA Research which said China's export sector remains the weakest link in the economy, though government-sponsored infrastructure construction is booming.
"In other words, the U.S., the largest consumer purchasing body, has cut back on demand for China's products, particularly consumer electronic products," Castellano said. He added that the upsurge in China has done nothing for the IC industry, instead causing commodity prices such as oil and copper to rise.
The Information Network is offering for sale through its website a new report titled, "The Global Market for Equipment and Materials for IC Manufacturing." |
