July chip figures: What analysts are saying (Part 2)

So far, analysts from Carnegie ASA, Gartner and Semico have separately interpreted the data. Now, Cowan, Databeans and Semiconductor Intelligence have added fuel to the fire.

As reported, the three-month average of global sales of semiconductors rose to $18.15 billion in July, up 5.3 percent from $17.24 billion in June. July sales were down 18.2 percent from $22.19 billion in July 2008, but we're ahead of expectations.

The figures, released on Monday (Aug. 31), are based on statistics gathered by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average of chip shipments.

What is your take on the figures? Meanwhile, here's what other analysts said about the data:

Mike Cowan, independent industry analyst:

''It should be highlighted that July's actual cumulative year-to-date sales (of $114.82 billion) growth (compared to July 2008 actual cumulative year-to-date sales of $148.29 billion) came in at minus 22.6 percent indicating that the model is projecting an improvement relative to today's 2009 actual year-to-date sales growth number, for the full year.

The latest run of the Cowan LRA sales forecasting model reflecting July 2009's actual global semiconductor sales (of $18.891 billion) has yielded 2009 and 2010 sales growth estimates of minus 17.4 percent and plus 8.1 percent, respectively. This compares to last month's forecast estimates of minus 20.0 percent and plus 8.0 percent, respectively. The corresponding global semiconductor sales forecast estimates for 2009 and 2010 are $205.400 billion and $222.112 billion, respectively.''

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Susie Inouye, research director at Databeans Inc.:

''Databeans has revised its forecast for 2009 worldwide semiconductor revenue up from $206.5 billion to $217.3 billion, which results in a 13 percent decline -- a four percent increase over the previous estimate.

Looking back, at December and January, the sound of silence was deafening. Orders were pulled and the semiconductor manufacturing machine came to an abrupt halt. In February through June of this year, the progression of improvement began, coaxed by stimulus packages and carefully considered and minimal consumer spending. Now eight months into the year, the 'sound of momentum' can clearly be heard. Some scoffed at a 'V' shaped recovery back then, but it appears that this is the case. Further, we are not expecting a double-dip scenario in the chip industry.

With an unseasonal July, which was down just slightly from June (July has been down 17 percent sequentially on average for over ten years now), the chip industry has made significant progress up the other side of the 'V', and it is not just microprocessors, and it is not just in the Americas, although both have contributed to the rebound.

While it is true that the Americas region is expected to be the first to post higher revenue in the third quarter this year than for the same period a year ago, this region is not driving the recovery. With the exception of a few chip categories, like microprocessors (albeit this one is a great contributor to worldwide revenue), the Americas has the minority share of revenue, so the return to growth is more of a direct result of climbing out of a 'smaller ditch.' What is more notable is the progress made starting in the Asia Pacific region and now in Japan, which has been quiet until now, conservatively waiting to place orders again.

We believe that while the PC market is poised for recovery, increasing microprocessor ASPs are contributing to the stronger numbers in the third quarter. Mobile phone shipments are anticipated to increase with new models set to launch during the second half of the year, but the consumer audio and video sector seems to be more at play here near term, much like wireless was in the second quarter. This ties into improved conditions in Japan, which has posted positive monthly sequential growth for semiconductors since February and is the only region to do so.''

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Bill Jewell, principal of Semiconductor Intelligence LLC:

''Assuming the 2Q09 recovery in the world semiconductor market continues, what is the outlook for capacity? The most likely outcome is a shortage of capacity sometime in 2010.

Second quarter 2009 data from SICAS (Semiconductor Industry Capacity Statistics) shows a 3.7 percent drop in total IC capacity in from 1Q09, the third straight quarterly drop. IC capacity in 2Q09 was 13 percent below a year ago. The good news is a significant jump in IC wafer starts, up 31.9 percent from 1Q09. Despite the 2Q09 jump, starts were still 24 percent below the 2Q08 peak.

IC capacity utilization (the ratio of starts to capacity) was 77.8 percent in 2Q09, a substantial increase from 56.8 percent in 1Q09. The 1Q09 utilization was a record low since SICAS data began in 1994. The previous low was 64.2 percent in 3Q01.''