Semi Foundry Sales See Massive Slowdown in 2011 on Light PC Shipments (IBM) (TSM) (SMI)
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Stocks of chip manufacturing companies are looking strong Friday amid a 2011 growth wrap-up by research firm Gartner.
According to data, the worldwide semiconductor foundry market totaled $29.8 billion in 2011, a 5.1 percent increase from 2010.
Factors hampering growth included the Japanese earthquake and tsunami last March and Thai floods later in the year. However, amid the challenges, depreciation in the U.S. dollar aided gains; the growth would have otherwise been just 0.7 percent with the effect of currency.
The growth was notable to be sure, but sales from 2009 through 2010 grew 40.5 percent. Slumping PC sales may have taken chip revenue to the loss column if not for strong performance from the mobile and tablet PC segments.
Leading sales in 2011 were:
"Given the aggressive capital spending by large foundries during 2010 and 2011, the oversupply of foundry capacity was inevitable," said Samuel Tuan Wang, research director at Gartner. "The utilization rate for foundries continued to decline quarter to quarter in 2011, causing the annual average utilization rate to drop to 81 percent from 91 percent in 2010. Advanced technology for mobile applications was the driver for the growth of foundry business in 2011, and the demand is expected to remain high during the next few years."
No outlook was given for 2012 in the report.
The Semiconductors ETF (NYSE: SMH) is up about 1 percent this afternoon.
According to data, the worldwide semiconductor foundry market totaled $29.8 billion in 2011, a 5.1 percent increase from 2010.
Factors hampering growth included the Japanese earthquake and tsunami last March and Thai floods later in the year. However, amid the challenges, depreciation in the U.S. dollar aided gains; the growth would have otherwise been just 0.7 percent with the effect of currency.
The growth was notable to be sure, but sales from 2009 through 2010 grew 40.5 percent. Slumping PC sales may have taken chip revenue to the loss column if not for strong performance from the mobile and tablet PC segments.
Leading sales in 2011 were:
- Taiwan Semi (NYSE: TSM), up 9 percent to $13.33 billion;
- United Micro (NYSE: UMC) saw a 5.8 percent drip to $3.82 billion;
- GlobalFoundries popped just 1.7 percent for sales of $3.52 billion;
- Semiconductor Manufacturing (NYSE: SMI) sales dropped 15.1 percent to $1.55 billion; and
- TowerJazz reported a 20.4 percent uptick to $509 million.
"Given the aggressive capital spending by large foundries during 2010 and 2011, the oversupply of foundry capacity was inevitable," said Samuel Tuan Wang, research director at Gartner. "The utilization rate for foundries continued to decline quarter to quarter in 2011, causing the annual average utilization rate to drop to 81 percent from 91 percent in 2010. Advanced technology for mobile applications was the driver for the growth of foundry business in 2011, and the demand is expected to remain high during the next few years."
No outlook was given for 2012 in the report.
The Semiconductors ETF (NYSE: SMH) is up about 1 percent this afternoon.
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