Top Story : Semicon – Turning stronger in 2010 Overweight Sector Update
- Gartner expects 2010 silicon wafer demand to increase 29.5% largely due to production ramp-up by major foundries to replenish the low-inventory level to replenish the low-inventory level plus anticipation of higher chips demand ahead.
- Global chip sales growth will be driven mainly by CE. We believe general theme for new product features going forward would include smaller form factor and lower ownership cost as well as greater wireless compatibility.
- Capex spending is expected to increase significantly over the next two years. Jan 10 equipment bookings were 3.5x higher than the 12-year low of US$247m in Mar 09.
- We believe chip players would likely focus on specific segments in which they have technological advance to improve its profit margins. We are positive on the latest development as this would benefit chip assemblers as margins for Unisem and MPI would likely remain resilient, supported by its customers’ higher-margin products.
- Reiterating our Overweight stance on the sector. Our top pick for the sector is Unisem.
RHB Equity 360°( Semicon, Top Glove, Astro, Genting; Technical: Globetronics)-18/03/2010
No comments:
Post a Comment