MIDF upgrades semi-conductor sector, calls "buy" on Globetronics
Business & Markets 2013
Written by Zatil Husna of theedgemalaysia.com
Wednesday, 06 November 2013 15:59
KUALA LUMPUR (Nov 6): MIDF Research has upgraded the semiconductor industry to ‘positive’ from ‘neutral’ due to increased sales on the back of strong demand for memory products.
The research firm believes that 2014 will be a positive year for the semiconductor industry.
Under the radar of the research firm are Unisem Bhd (‘sell’, TP: 62 sen), Globetronics Technology Bhd (‘buy’, TP: RM3.06) and Malaysian Pacific Industries Bhd (‘not rated’, TP: 2.90).
Global semiconductor sales (GSS) in September 2013 rose to US$27 billion, up 8.8% year-on-year (y-o-y), 6.6% month-on-month (m-o-m) in September.
America led the pack with growth of 23.9% y-o-y to US$5.5 billion, followed by Asia Pacific, up by 10.1% to US$ 15.3 billion and Europe, up 6.1% to US$3 billion.
“However, sales in Japan remained lacklustre. Sales in September declined 12.6% to USD3.2 billion annually. This was due to the devaluation of the Japanese yen.
In September this year, the average USD/Yen exchange rate was 99.20, a dollar appreciation of 26.9% y-o-y. However, sales have been consistently rising since July this year.
For the quarter-in-view, GSS amounted to US$78.4 billion, an average of US$26.1 billion per month or growth of 7% y-o-y.
“Looking forward based on optimism, other product segments also registered strong growth, including analog and logic products.
“We now believe that an upcycle is in the offing. Sales have consistently been recorded above the definitive mark of above US$25 billion.
Based on a report from IHS, the supply chain for mobile devices alone is poised to become more valuable than factories servicing entire consumer electronics market.
Revenue from OEM factories worldwide that produced “media and PC tablets” and 3G/4Q cell phones will reach US$354.4 billion by year end.
However, factories for consumer tech are expecting to deliver US$344.4 billion in revenue this year.
According to International Data Corporation (IDC), PC shipments of 81.6 million beats markets expectations.
However, sales are still falling as shipments were down 8% from the same time last year. This is mainly due to higher business volume for the enterprise and public sector.
Lenovo, HP and Dell saw their market shares in 3Q13 expanded to 17.3%, 17.1% and 11.7% respectively. This is compensated by declining in Acer and Asus’ market share to 6.7% and 5.2% respectively.
In light of this, IDC commented that these figures should not be construed as a comeback for the global PC industry.
Publish date: 06/11/13