All signs point to IC downturn
August 19, 2010 // Dylan McGrath
Semiconductor industry capacity utilization will peak during the third quarter at 96 percent, then decline to 90 percent in the fourth quarter, according to a Wall Street analyst who believes that the chip industry is headed for a downturn.
"All signs point to another semiconductor downturn as there have now been signs of softening demand from approximately 65 percent of total semiconductor demand," wrote Christopher Danely, an analyst at J.P. Morgan, in a report circulated Wednesday (Aug. 18).
Danely said the PC end market, which accounts for 40 percent of semiconductor sales, appears weak. The communications end market, which accounts for 25 percent of chip sales, is also showing signs of weakness, Danely said, pointing to Cisco Systems Inc.'s second quarter results, which disappointed analysts.
Last week, Danely issued a report saying checks in the Taiwan PC supply chain indicated that order rates from the PC end market deteriorated sharply during the last part of July.
On Tuesday, the Semiconductor International Capacity Statistics organization reported that worldwide wafer fab capacity utilization hit 95.6 percent in the second quarter, up from 93.5 percent in the first quarter.
Danely said J.P. Morgan expects utilization rates to increase to 96 percent in the third quarter due to a 2 percent sequential increase in capacity and a 2 percent increase in wafer demand. But he said the firm expects utilization rates to decline to 90 percent in fourth quarter due to an inventory correction. Danely expects capacity to increase another 2 percent sequentially in the fourth quarter, higher than seasonally normal, while he expects demand to drop by 5 percent sequentially.
Danely said utilization rates and semiconductor stock values have followed the same pattern as they did in 2004, but with a one quarter lag. In 2004, semiconductor stocks peaked in the first quarter and utilization rates peaked in the second quarter, he said. "Similarly, we believe semiconductor stocks peaked in 2Q10 and expect utilization rates to peak in 3Q10," he wrote.
Other analysts disagree with Danely's assessment. Bill Jewell, principal at consulting firm Semiconductor Intelligence LLC, said he believes capacity utilization will continue to increase through the rest of the year, hitting 96 percent in the fourth quarter. Jewell said he believes end demand will hold up at least through the end of this year. "I think capacity got cut so far back last year and just has such a long way to come back," Jewell said in an interview.
Google locks future wearable IP with smart lens patents
April 16, 2014
Yesterday, 15th of April, US-based Google fans were granted the privilege to exchange $1500 for a “pair” of Google Glass. ...
Porsche connects infotainment to cloud with HTML5
Anglia signs with DEM Manufacturing
RFMW Ltd to distribute Aviacomm’s transceivers
Sensors, actuators market on 11% CAGR to 2018
Additional conference complements Sensor + Test trade fair
April 15, 2014
As an add-on to the Sensor + Test trade fair later this year in Nuremberg (Germany), the organizer plans to launch the European ...
End of Windows XP boosted 1Q14 PC sales, says Gartner
Global HB LED market set to shine by 2018
Chinese smartphone maker undercuts western companies
- USB 5V 2.5A Output, 42V Input Synchronous Buck with Cable Drop Compensation
- Measurement applications across multiple test platforms
- Supplying DC input power to string inverters
- Supplying DC input power for HEV testing
InterviewHeartbleed challenges the Internet of Thing
The Heartbleed security bug is a key example of the fundamental security challenge for the Internet of Things says Green Hills Software as it launches a new security group.
Filter WizardCheck out the Filter Wizard Series of articles by Filter Guru Kendall Castor-Perry which provide invaluable practical Analog Design guidelines.
Linear video channel
READER OFFERRead more
This month, Arrow Electronics is giving away ten XMC1200 lighting application kits, worth 100 Euros each, for EETimes Europe's readers to win.
Each kit combines Infineon’s brightness and colour control XMC1200 CPU board to drive flicker free LED dimming and colour changing, together with a colour LED card and a white LED card.
December 15, 2011 | Texas instruments | 222901974
Unique Ser/Des technology supports encrypted video and audio content with full duplex bi-directional control channel over a single wire interface.