Sputtering Economy, Weak PC Demand Hurt Chip Makers (INTC) (AMD)
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Rating Summary:
23 Buy, 25 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 27 | New: 13
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Analysts at IHS downgraded their forecast for 2012 global semiconductor chip revenue due to weakening economic conditions and reduced demand for PCs. Global semiconductor revenue is expected to decline by 0.1 percent, according to IHS. This will mark the first annual decline for the global semiconductor industry since 2009.
“The expected decline in 2012 represents a major event for the global semiconductor market,” said Dale Ford, senior director at IHS. “Throughout all of 2011, even though electronics markets were very weak, IHS never projected revenue to decline for the entire year. However, the disappointing results in the second quarter and weak third-quarter expectations driven by poor economic conditions are expected to cause the semiconductor market to retreat this year.”
Year-to-date share of Intel Corporation (Nasdaq: INTC), the largest chip maker, have gained only 2 percent. Consumer demand in North America and Western Europe has yet to recover and emerging markets demand has slowed.
Advanced Micro Devices, Inc. (NYSE: AMD) is lower by 28.38 percent. In July, the company lowered guidance because of weaker-than-expected sales in China and Europe and lackluster overall demand.
Revenue growth in the second quarter for chip makers amounted to only about 3.0 percent compared to the first quarter—a tepid level of increase when seen against historical averages. Revenue guidance from key chip suppliers for the third quarter indicates the overall market will grow by just slightly more than 6.0 percent sequentially, another weak performance, noted the report by IHS.
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“The expected decline in 2012 represents a major event for the global semiconductor market,” said Dale Ford, senior director at IHS. “Throughout all of 2011, even though electronics markets were very weak, IHS never projected revenue to decline for the entire year. However, the disappointing results in the second quarter and weak third-quarter expectations driven by poor economic conditions are expected to cause the semiconductor market to retreat this year.”
Year-to-date share of Intel Corporation (Nasdaq: INTC), the largest chip maker, have gained only 2 percent. Consumer demand in North America and Western Europe has yet to recover and emerging markets demand has slowed.
Advanced Micro Devices, Inc. (NYSE: AMD) is lower by 28.38 percent. In July, the company lowered guidance because of weaker-than-expected sales in China and Europe and lackluster overall demand.
Revenue growth in the second quarter for chip makers amounted to only about 3.0 percent compared to the first quarter—a tepid level of increase when seen against historical averages. Revenue guidance from key chip suppliers for the third quarter indicates the overall market will grow by just slightly more than 6.0 percent sequentially, another weak performance, noted the report by IHS.
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