Posted on 05/30/2003 3:14:23 AM PDT by Starwind
UPDATE - Global chip sales growth slows in April -report
Friday May 30, 5:37 am ET
By Lucas van Grinsven, European Technology Correspondent
(Adds analyst comment, detail, shares)AMSTERDAM, May 30 (Reuters) - Global semiconductor sales growth slowed more sharply than expected in April, highlighting the impact of weak consumer demand for PCs and cell phones, figures from an industry group showed on Friday.
Monthly sales of $12.14 billion were flat compared with March and up just 9.7 percent on the same month a year ago, down from growth rates of more than 20 percent earlier this year, the World Semiconductor Trade Statistics (WSTS) group said.
Sales in Asia Pacific and Japan, where most chip and electronics producers are based, rose slightly compared with March, while sales in the Americas and Europe declined, the group said.
April sales were weaker than expected, continuing a growth slowdown amid weakening Asian consumer demand for PCs and cell phones due to the SARS virus, analysts said. Many see demand stagnating in the second half of the year as comparisons become tougher and demand slackens.
"The $12.14 billion is lighter than expected. End demand has been disappointing in April. Should this continue, semiconductor vendors...will end the quarter with higher inventories," said Deutsche Bank analyst Nicolas Gaudois.
Chips are used in everything from computers and cell phones to toys and cars. Sales growth has slowed this year as a recovery from the industry's worst-ever downturn loses momentum, reflecting general economic weakness, the impact of war in Iraq and SARS which is hurting demand especially in China.
SALES GROWTH DOWN
The U.S.-based Semiconductor Industry Association (SIA) last month trimmed its estimates for the chip industry. It initially expected 20 percent revenue growth and adjusted that to "double digit" expansion. Yet many financial analysts see even that as optimistic and expect sales up between five and 10 percent.
The WSTS numbers, a three-month moving average published by the European Semiconductor Industry Association (ESIA), offsets recent bullish remarks by Franco-Italian semiconductor maker STMicroelectronics (ST) (Paris:STM.PA - News) and reaffirmed guidance by U.S. chip equipment maker Novellus (NasdaqNM:NVLS - News). ST, Europe's largest chip stock and the number four producer in the world, told analysts this week it believes the global chip industry could grow by 11 percent this year, and that it might increase its investments by $200 million to $1.2 billion if the industry remains robust, J.P. Morgan said in a note.
ST's shares dropped 0.7 percent at 18.94 euros, while the wider DJ Stoxx European technology index was up 0.7 percent. Other major European chip stocks rose, with the FTSE European semiconductor index (^FTTXSVC - News) rising 1.4 percent.
The main U.S. chip index, The Philadelphia Semiconductor index (Philadelphia:^SOXX - News), closed 3.1 percent higher on Thursday at its highest level in nearly six months. The index has nearly doubled in value from a low seen last October.
Richard W.
More speculative mania stuff and momentum trading fueled by casino mantality hype and toooooo much liquidity. Plus we have the insider and institutional distribution to Joe-6 and his mutual funds as all the risk is passed off to the serfs again -- that may be what is really behind it all along, plus the desire and pressure on the FED to paint a rosy economic picture for the politicians.
Someone on another board said that Illinois and possibly several other state pension funds are talking of borrowing money to buy stocks. Just when you think that things can't get anymore screwed up and crazy, you hear something like that.
With Greenspan liquifying the planet, every company that has never earned a dime such as SIRI and LVLT has access to new mountains of money to burn. Even LU is borrowing again. We didn't learn a thing from the 90's bubble.
Richard W.
Richard W.
"A handful of cash-strapped states plan to borrow to put money into their state employee pension systems, an idea that analysts say is a gamble that might not pay off."
States Mull Borrowing To Bolster Pension Plans
I'm sure that at least a portion of that new cash will be invested in equities.
Richard W.
I'm not even going to argue the point with you. I know that you are a pretty smart guy and that means that you also already know the answer to that.
Richard W.
The tech-loaded Nasdaq composite (NasdaqSC:^IXIC - News) rose 20.96 points, or 1.33 percent, to 1,595.91, ending at its highest level in a year. The Standard & Poor's 500 (CBOE:^SPX - News) climbed 13.95 points, or 1.47 percent, to 963.59, its highest close since early July. The blue-chip Dow Jones industrial average (CBOT:^DJI - News) jumped 139.08 points, or 1.60 percent, to 8,850.26, its highest close this year.
The National Association of Purchasing Management-Chicago business barometer rose to 52.2 from 47.6 in April, powered higher by a pick-up in both new orders and production. A reading below 50 indicates a contracting regional manufacturing sector, while a reading above 50 signals expansion.
Yah, I do know the answer to that. That is why I'm getting into stocks as much as I can.
In that case, good luck to you. Bubble mania is alive and well.
Richard W.
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