Samsung, the world’s largest chip producer said that the current global economic uncertainties coupled with continued weakness in the PC market and falling consumer confidence in the key US and European markets suggest down side risks to their previously bullish growth outlook for the semiconductor industry going forward.
As a result, the company is planning to reduce their capex budget for the remaining of the year as well as next year.
In line with the above announcement, Gartner also revised down their previous marginal growth forecast for semiconductor producer’s capex budget next year to a sharp decline of 19%.
Gartner said that the slowdown seems to be across the board and may last until mid-2012.
Even investment for Nand-Chips which had experienced strong growth previously due its use in the highly popular iPads has also softened recently.
The above justifies our continued negative view on the semiconductor sector.
We have a sell on Stats Chippac, a view we have maintained since late 2010 (the stock remains stuck in a well-entrenched downtrend channel established since late 2010). Other stocks with exposure to the sector include Rokko, MIT, AEM, Hisaka, Micro Mechanics, Serial System and ISDN.
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