CHICAGO, May 29, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Semiconductors, including MEMC Electronic Materials (NYSE:WFR), Intel (Nasdaq:INTC), Texas Instruments (Nasdaq:TXN) and Qualcomm (Nasdaq:QCOM).
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A synopsis of today's Industry Outlook is presented below. The full article can be read at
Link: http://www.zacks.com/commentary/27468/semiconductor-stock-outlook-may-2013
Demand may be expected to pick up this year, as most OEMs and their channel partners have been reducing inventories and cutting utilization. PC and microprocessor inventory reduction has been significant, but should pick up this year, driven by new product launches. Handset inventory declines were significant exiting 2012, driven by strong demand. Analog, discrete and storage inventories were also pretty lean, according to research firm iSuppli.
Irrespective of the fact that inventories remain lean, we expect production increases to remain conservative, with shipments reflecting consumption, as manufacturers are likely to remember last year when the first half production increases had to be set off with second half cuts.
Still, DRAM demand is likely to increase somewhat, not only because of stronger demand from the PC market, but also its application in mobile devices like tablets and smartphones. NAND demand is also accelerating, with most manufacturers already ramping production (IC Insights). Standard logic will however remain weak this year, but increase thereafter (iSuppli).
Another noticeable trend is the increased outsourcing of manufacturing to foundries, which is giving rise to more concentrated supply from a few companies. This, along with stronger demand should result in firmer prices this year. IC Insights expects the stronger pricing to drive a 50% growth in tablet processor revenues, 28% growth in cell phone processors, 13% in wired special purpose logic, 12% in NAND and 11% in application-specific analog devices.
Demand at the wafer is also expected to be strong, with MEMC Electronic Materials (NYSE:WFR) projecting a revenue increase of 6.8% in 2013. WFR is the primary wafer supplier to foundries and other semiconductor manufacturers.
Forecast for 2013
According to World Semiconductor Trade Statistics (WSTS) data, there should be positive worldwide semiconductor sales growth of 4.5% in 2013, following the 3.2% decline in 2012. Gartner and IC Insights are close to this, with projections at 4.5% and 6.0%, respectively. iSuppli is more optimistic, predicting sales growth of 8.2%.
Major Players
The major players in the industry may be categorized into chipmakers (OEMs-whether fabless or otherwise), equipment and material suppliers and foundries.
Chip-makers
According to estimates from IHS iSuppli, Intel (Nasdaq:INTC) and Samsung remained the top two semiconductor suppliers in 2012. Texas Instruments (Nasdaq:TXN) slipped to number four, as Qualcomm (Nasdaq:QCOM) jumped from the sixth position in 2011 to the third in 2012.
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