Intel Corp (INTC)

[VeeCee]

Finally there is a hope in PC industries.
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http://blogs.barrons.com/techtraderdaily/2013/10/14/intc-amd-can-benefit-from-15-20-chip-sales-growth-in-14-says-wells/
INTC, AMD Can Benefit from 15%-20% Chip Sales Growth in ’14, Says Wells
By Tiernan Ray

Wells Fargo‘s David Wong today offers up his reading on trends in the chip industry, citing data from the Semiconductor Industry Association, showing what he thinks is “the beginning of a seasonal pickup in PC activity.”

There have been month on month increases in year-over-year semi sales for several months, he notes:

Global semiconductor sales are continuing to improve steadily, with year-over-year growth of 10% in the month of August, following 8% growth in July, 2% growth in June and 6% growth in May. The three-month rolling average of chip shipments was up 1% month over month in August, following 3% month-over-month growth in July, 1% growth in June and 5% in May.

He likes more recent trends, too, and thinks even the bad news about the PC market has been encouraging:

Sales for our Taiwanese notebook original device manufacturer (ODM) aggregate rose 13% month over month. Notebook unit shipments from Taiwanese ODM companies rose 8% month over month. Our aggregate of Taiwanese motherboard/computer companies rose 42% month over month and even excluding Pegatron, which had an unusual increase, sales for the other companies was up 29% month over month. Several Percent Sequential Growth For PCs In The September Quarter As A Whole Sales for our Taiwanese notebook ODM aggregate rose 7% sequentially. Notebook unit shipments from Taiwanese ODM companies rose 3.5% sequentially. Our aggregate of Taiwanese motherboard/computer companies rose 22% sequentially and was up 17% even if we exclude Pegatron. Gartner estimates that worldwide PC market unit shipments grew 6% sequentially. Improving Year-Over-Year Comparisons
? September-quarter sales for our Taiwanese notebook ODM composite decreased 4% year over year, an improvement over the 6% year-over-year decline for the June quarter For the September quarter as a whole, notebook units for our aggregate fell about 7.5% year over year, an improvement over the 9.5% year-over-year decline in the June quarter. Aggregate revenue for our aggregate of Taiwanese motherboard/computer increased 4% year over year in the September quarter, compared to a 5% drop in the June quarter. Gartner’s number for the global PC market in the September 2013 quarter implies shipments decreased 9% yr/yr compared to an 11% decline in the June quarter and a 13% decline in the March quarter.

Wong maintains a forecast for chip sales growth of 8% to 20% this year, although if trends keep improving, sales “could exit this year with year-over-year growth of close to 20%,” leaving 2014 with growth of 15% to 20%.

Wong adds that chip equipment spending has been slowing and may result in higher fab utilization by Intel (INTC) and others, leading to strength in pricing:

The ratio of worldwide semiconductor equipment sales to semiconductor IC sales was 11.4% in August, compared to 12.9% in July and 12.3% in June. We consider this to be a low ratio of reinvestment compared to the more typical 15-20% we have seen in recent “normal” years, suggesting that the chip industry is continuing to hold down spending to avoid excess capacity issues, in our view. The North American semiconductor equipment data showed that the book-to-bill ratio was 0.98 in August compared to 1.0 in July and 1.1 in June. Meanwhile, bookings decreased 3% month over month in August. It appears that semiconductor equipment demand might be moderating after several months of solid growth in the early part of 2013. We believe capacity expansion will remain muted through the rest of 2013, and we expect capacity utilization will rise as chip demand recovers, resulting in firm chip pricing.

Among Wong’s chip stock ratings, he has an Outperform on shares of Intel, Linear Technology (LLTC), Analog Devices (ADI), Altera (ALTR), Advanced Micro Devices (AMD), Hittite Microwave (HITT), International Rectifier (IRF), Micrel (MCRL), Microsemi (MSCC), Monolithic Power (MPWR), Qualcomm (QCOM), and Spansion (CODE). He has Market Perform ratings on Broadcom (BRCM), Maxim (MXIM), Nvidia (NVDA), Texas Instruments (TXN), and Xilinx (XLNX). He rates Micron Technology (MU) shares Underperform.