Replies to post #1024 on Intel Corp (INTC)

[fowler]

SIA issues August numbers, adds PC to positive outlook
By Peter Clarke
Semiconductor Business News
(10/01/02 07:47 a.m. EST)

SAN JOSE, Calif. -- While posting a 2.2% sequentially increase to $11.93 billion for global chip sales in August, the SIA has added PCs to a list of recovering markets, saying it can see signs of both "back-to-school" purchasing and anticipatory purchasing for the end of year holiday season.

George Scalise, president of the Semiconductor Industry Association, spoke of the industry being, “in the midst of a broadly-based upturn” in a statement that accompanied the group's monthly chip market report for August.

The SIA's numbers were a repetition of those issued Monday (September 30, 2002) by the European Electronic Component Manufacturers Association (EECA) (see September 30 story ) but the SIA has provided additional commentary.

For 2002 as a whole, the SIA is sticking with its previous predictions of chip sales to rising 3% from 2001 to $143 billion (see September 3 story). Similarly it continues to forecast accelerated growth rates exceeding 20% in both 2003 and 2004.

Both the SIA and EECA receive their numbers from the World Semiconductor Trade Statistics (WSTS) organization, which compiles them as three-month moving monthly averages to smooth out large swings.

On a year-to-year basis, the $11.93 billion chip sales in August were up 14.2% from August of 2001, the first double-digit increase from the industry's cyclical low in 2001, the SIA observed.

"After 5.6% sequential growth in the first quarter of 2002 and 5.8% growth in the second quarter, the double-digit year over year increase in August sales is yet further evidence of a sustained and durable recovery," said Scalise in the statement.

The statement went on to state that the wireless market continues to be the strongest end market, as reflected in the growth of sales of chips used in handsets, as new subscribers sign up in Asia and existing customers upgrade to newer technologies.

However, the SIA disagreed with at least one market prognosticator when it said it could see evidence of back-to-school purchases and anticipation of the consumer holiday buying season in the PC market.

Unlike IDG (see October 1 story) the SIA asserted that both trends were in evidence with sequential increases in microprocessor and DRAM revenues. A number of product lines registered increases in average selling price in August as rising demand and the prior runoff of inventory produced a better overall supply/demand balance, the SIA said.

Digital consumer products, such as DVDs, digital cameras and video games, continued to lead the growth in Asian markets.

Chip consumption in Japan was up 3.5% in August, reflecting Japan's continued strong export sales of popular consumer products. The Asia Pacific market registered growth of 2.7%, led by strong demand for wireless handsets as subscribers come on line in China and Asian consumers migrate to 2.5G technology.

The SIA said the decining chip sales in the Americas, by 0.7%, reflected the outsourcing of equipment manufacturing to Asian locations. In Europe, sales were up 2.8% primarily due to the wireless sector.

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Spokeshave, Re: I would not touch either one right now.

That's actually the same stance that I have taken, if you've noticed. My prospects for Intel have always been long term, and my recommendations have always been to find a bottom, then accumulate. Since a bottom is not in sight, I would therefore avoid any purchases right now as well. For AMD, the bottom is clearly nowhere to be seen, and it will very much depend on their ability to deliver real products, rather than vapor. Assuming that they can get things back together, reduce costs, and improve their competitive position, they may be able to return to profitability next year, and see some growth in their stock price. Until anyone sees positive news from that company, and not B.S. from press releases, they should avoid AMD stock altogether.

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