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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (11016)	7/27/2004 9:19:59 PM
From: Proud_Infidel	Respond to of 25522

iSuppli raises 2004 mobile phones forecast By Peter Clarke Silicon Strategies 07/27/2004, 7:00 PM ET EL SEGUNDO, Calif. -- Robust shipments of mobile phones in the first half of 2004 indicate the market will enjoy stronger-than-expected growth this year, according to iSuppli Corp. As a result the market research firm has raised its estimate for 2004 global mobile phone shipments to 625 million units up from its previous estimate of 600 million units. Worldwide mobile phone shipments grew to 155 million units in the second quarter, up 1.6 percent from 152.5 million units in the first quarter, which was unseasonably strong this year. Mobile-phone shipments totaled 307.5 million units for the first half of the year. ISuppli said it sees no signs of mobile-phone demand weakening and that the second half of 2004 would be even stronger than the first, following normal seasonal patterns. The firm estimates that 520.8 million mobile phones were shipped in 2003 so the latest estimate for 2004 represents a 20 percent annual increase. As in 2003, mobile phone demand in 2004 is being driven by upgrade sales, rather than by new user purchases. A subsidized upgrade cycle has become a part of network operators' arsenal of competitive tools and iSuppli predicts that 73 percent of worldwide mobile phone sales in 2004 will be upgrades. Upgrades are expected to account for 90 percent of the market by 2008. Most users are upgrading to phones that incorporate digital cameras and color displays with camera phones now represent more than one quarter of all handsets being shipped, iSuppli estimates. Even Nokia, a latecomer to the camera phone segment, says that 20 percent of the handsets it is now shipping have cameras. Another factor driving upgrade sales is the increasing acceptance of Wideband Code Division Multiple Access (WCDMA). WCDMA is a 3G phone standard that delivers faster data speeds than conventional CDMA can. In the second quarter, mobile phone manufacturers, including LG Electronics, reported increased WCDMA handset shipments, and Qualcomm reported a rise in WCDMA royalties. WCDMA handsets should continue to claim a larger percentage of total handset sales this year, with shipments growing by more than 300 percent compared to 2003. Market leader Nokia shipped 45.4 million mobile phones in the second quarter, allowing it to retain the 29.3 percent market share it held in the first quarter. Rival mobile phone makers Samsung Electronics, LG Electronics, and SonyEricsson all gained significant share in the second quarter. Samsung Electronics gained one percentage point in market share in the second quarter to reach 14.6 percent and is catching up with the number-two handset manufacturer, Motorola Inc., whose share stood at 15.3 percent, iSuppli said.

To: Cary Salsberg who wrote (11016)	7/28/2004 8:10:19 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

UPDATE - UMC upbeat after strong Q2 despite analyst doubts Wednesday July 28, 5:23 am ET By Roger Tung (Adds details, background) TAIPEI, July 28 (Reuters) - UMC (Taiwan:2303.TW - News), the world's second-largest contract microchip maker, posted a near-fivefold jump in quarterly profits on Wednesday and forecast further growth on strong demand for chips for mobile phones. United Microelectronics Corp.'s (UMC) (NYSE:UMC - News) better-than-expected profit was its strongest since 2000 and the company brushed aside investor concerns that demand for chips is peaking as the United States and China act to slow their economies. "Demand is increasing, revenue and profit are expected to grow in the third quarter," Chief Executive Jackson Hu told an investors' conference. He said orders for chips used in cellphones were especially strong. Texas Instruments Inc. (NYSE:TXN - News), UMC's main customer for such chips and the market leader in the segment, said this month that its quarterly profits soared nearly fourfold. But in contrast to UMC's optimism, TI said demand slowed somewhat in the second half of the quarter and growth over the rest of the year would be moderate. UMC said third-quarter shipments would rise 15-16 percent over the previous quarter, while the average selling price for its chips would edge up 3-4 percent. The company said it would maintain its capital expenditure budget this year at US$2.15 billion, a positive sign as analysts had said a cut would indicate the company was receiving fewer orders than it had forecast. MARGINS RISING For the quarter to June 30, net profits soared to T$12.7 billion ($37 million) from T$2.69 billion a year earlier, easily outpacing analyst expectations of T$10.75 billion. Its bigger rival, Taiwan Semiconductor Manufacturing Co. (TSMC) (Taiwan:2330.TW - News; NYSE:TSM - News), reports on Thursday. UMC's gross profit margin rose to 34.5 percent in the second quarter from 30.1 percent in the first quarter, and Hu said it would increase further in the current quarter. But analysts remained concerned that slower economic growth in the United States and China -- Taiwan's top export markets -- and a build-up in inventories at electronics retailers would hurt UMC later in the year. Investors would have to monitor third-quarter inventory levels of downstream customers, said Dan Heyler, a semiconductor analyst with Merrill Lynch. Shares in UMC and TSMC have given up about 29 percent and 23 percent, respectively, over the past three months, compared with a 18 percent loss in the benchmark TAIEX (Taiwan:^TWII - News) share index, as investors anticipate weakening demand for electronics. The sector's third-largest player, Singapore's Chartered Semiconductor Manufacturing Corp. (SES:CSMF.SI - News; NasdaqNM:CHRT - News), posted its second straight quarterly profit last week, but said September quarter sales would be flat on weak demand for mobile phones and DVD players. Goldman Sachs, Merrill Lynch and Smith Barney have downgraded TSMC and UMC in recent weeks, saying slowing economic growth meant little upside for the shares. UMC shares closed up 0.47 percent at T$21.40 ahead of the results, while the benchmark TAIEX (Taiwan:^TWII - News) share index lost 0.28 percent. (US$1=T$34.2)