Top Story : Semiconductor – Feb 10 sales up a stronger yoy Overweight
Sector Update
♦ Feb 10 chip sales of US$22.0bn declined (-1.3% mom) after a gain in Jan. This is not unexpected as wafer foundries cut back on production on the anticipation of seasonally weaker sales in Feb.
♦ Equipment bookings in Feb 10 were up a whopping 377% yoy (vs. 325% in Jan 10) to US$1.23bn mainly due to higher investment in test capacity and wafer fabrication equipment as well as the low base factor in Feb 09. Despite a shorter working month in Feb 10, bookings were up 4.5% (vs. +29.1% mom in Jan 10) pointing towards stronger capex spending ahead.
♦ Separately, major computer suppliers (i.e. Acer and HP) expect notebook and netbook sales from emerging economies (i.e. China and Brazil) to register stronger growth in 2010-11 given the pent-up demand as consumer and corporates delay purchases of computers during the global economic crisis. In the same vein, Renesas (third-biggest chip maker) is looking into high-growth markets, moving away from stagnant markets (i.e. Japan and US).
RHB Equity 360°(Semicon; Technical: Lion Industries, Scomi) - 06/04/2010
- We are reiterating our Overweight stance on the sector. Our top pick for the sector is Unisem.
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