DataWasteOfTimeQuest says:
(can't find article)
6% down this year in sales and 12% up next year with PC chips
seeing comparatively weak revenue growth for next year but Std. cell ICs being 2nd strongest with DSPs strongest.
STMNotAWasteOfTimeDauvin says:
STMicroelectronics sees rise in world chip market in 1999
PARIS, Sept 29 (Reuters) - The chief economist of European semiconductor group STMicroelectronics said he expected the world chip industry to be down by 10 percent in 1998, but saw a rise in dollar terms of five to eight percent in 1999.
Jean-Philippe Dauvin, group vice-president, told Reuters in an interview he had downgraded his 1998 forecast from minus six percent.
''Dataquest recently said that the market could fall by six percent in 1998, I had the same forecast a number of months ago but now I think it is a little bit too rich,'' he said in an interview.
Dauvin said that it was still possible that the world chip market would hit bottom in the third quarter but it was more likely that it would do so in the fourth quarter.
''The fourth quarter could be sequentially growing by five to eight percent over the third quarter of 1998, but still negative compared to the fourth quarter of 1997 by three to five percent,'' Dauvin said.
He said the most optimistic forecast for 1998 would be a decline of eight percent.
He said there was price stablisation due to an increase of capacity utilisation estimated at 76 percent in August from 70 percent in July.
On the positive side, Dauvin said he expected strong personal computer sales across the board, including Japan, due to the arrival of PCs at below $1,000 for the home market and the high-end 400 MegaHerz computers for the corporate sector.
He said there would be continued growth in digital mobile telephone and related communications demand and in European production.
Despite a recent warning by Alcatel, ST's main client in mobile telecommunications, Nokia has upgraded its sales outlook.
Dauvin said that there were strong sales in television set-top boxes in the first half in the U.S. and expected strong sales in the second half in Europe, especiallly for Canal Plus. [shane's add: I think Canal Plus is/has been LSI's]
Dauvin said that there was still little transparency for the market and the first quarter of 1999 could still be weak.
In DRAM memory chips, a cumulative $38 billion in planned investment have been cancelled or postponed since the start of 1997 and total industry capital expenditure has been cut by 30 percent. [mmm...]
He also noted destocking in personal computer parts and disk drives in July and August which was depressing sales now but could be a sales driver in further months. [this is the inventory spring argument for PCs]
For 1999, Dauvin said that Dataquest's forecast of 12 percent growth was on the high side and he saw growth in the five to eight percent region.
He said that analogue integrated circuits could be an ''island of prosperity'' as they are building blocks for systems on chips.
Europe could grow faster than the U.S. market in 1999, due to a number of Europe-specific reasons such as the introduction of the euro which will make prices more transparent and lead to more competition, as well as the downward pressure on interest rates which will boost investment.
Japan, however, will have its fourth consecutive year of poor market results in 1999.
In the longer term, Dauvin remained bullish and while some analysts see a saturation in technology products, he said that the chip price/performance ratio had reached its highest threshold ever and would prompt new products. [saturation in tech. products - boy
don't these guys ever learn! - silly analysts!]
While Dataquest sees the world semiconductor market at $254 billion in 2002, Dauvin says he sees the market at over $300 billion in that year. [keeping the best news for last <wink> the harder they
fall the faster they rise <wink again> - in numbers this means that
with the say 7% rise in 1999 (I think this is low), he expects
a growth rate in sales of about 28% for the next 3 years - sales
up 28% a year means earnings up <money money money>. Since I expect LSI to beat the industry growth rate this year and next, LSI will
likely be at 1.25-1.28 b this year, maybe something like 1.4-1.5 b.
next year and then if it matches the 28% growth rate for the next 3
years, it will be at about 3 billion in 2002. Symbios may add about
1.2-1.5 billion for a total of 4.2-4.5 b. in 2002. So LSI from 1997 to 2002 has revenue go up from 1.25 to say 4.3 or about 28% a year for the 5 year period (cheating a bit including Symbios - but on a per share basis who cares - since my 1 share just bought a lot more sales and only the per share numbers are important to me) while the industry would be doing about 15% a year (again industry figures are without consolidation <g>). Nevertheless these are good figures. Translate that into earnings <wink>]
He said that the Asian crisis had accelerated a shake-out in the industry which was caused by over-expansion by some Korean and Taiwanese memory chip makers.
While a number of plant closures have now been announced, he expected an acceleration in industry consolidation -- joint ventures, alliances and mergers -- between now and the end of 1999. [LSI
is ahead of the game!]
STMicroelectronics is set to announce third quarter results by mid-October.
(from Reuters)
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Shane. |
