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Tuesday June 30, 1:49 pm Eastern Time
Semiconductors face more pressure-Merrill's Kurlak
NEW YORK, June 30 (Reuters) - The semiconductor sector faces more pressure and global sales could fall as much as 5 to 10 percent this year, said Thomas Kurlak, the widely watched semiconductor analyst at Merrill Lynch.
''In our view, the steepest part of the semiconductor slowdown has begun and is trending downward,'' Kurlak said in a report.
''End demand is slower in Asia and the U.S., and is beginning to slow in Europe,'' he added. ''We believe that semi-conductor unit sales may slow to single digits.''
''As wafer starts are being reduced, it appears that second half sales for many of the companies will decline,'' Kurlak said. ''We believe that revenues are contracting worldwide as pricing is roughly 15 to 22 percent lower, depending on the particular product.''
''We believe the stocks may make new lows and would expect this trend to continue for the second half of the year,'' Kurlak said.
In the same research summary, Merrill Lynch analyst J. Osha said that in distribution channels in both the United States and overseas suggest there is too much inventory in the channel and weak pricing for the semi-conductor industry.
The Philadelphia Semiconductor Index is off 19 percent since May 12, 1998, and 37 percent off its August 1997 high, Merrill noted.
The Philadelphia index (^SOXX - news) was off 2.86 points, or 1.14 percent, at 247.27 in early afternoon trading Tuesday. |
