Semiconductor : Aug chip sales Up 1.8% mom but slowing down yoy Neutral
Sector Update
Unisem : Maintain forecasts, fair value of RM2.31 Outperform
JCY : Maintain forecasts, fair value of RM1.32 Outperform
MPI : Maintain forecasts and fair value of RM6.35 Market Perform
Notion Vtec : Maintain forecasts, fair value of RM1.54 Underperform
-Aug chip sales growth continues with its tenth month of growth on yoy basis. However, growth continued to narrow to 32.6% vs. 37.0% in Jul and a high of 58.4% in Mar. Mom, Aug chip sales of US$25.7bn grew 1.8%, higher than Jul’s gain of 1.2%, but lower than the high of 5.2% in May. Geographically, Aug sales grew on a mom basis for US (+2.0%), Europe (+0.1%), Japan (+4.1%) and Asia (+1.4%).
-Separately, capex growth in 2011 is expected to moderate to 10% in 2011 (vs. 122.1% in 2010). Already, we understand Siliconware Precision Industries Co Ltd (SPIL) and Advance Semiconductor Engineering Inc (ASE) will spend cautiously for 2011 and have pushed back several purchases of advance machinery.
-In the near term, we remain cautious on the sector and reiterate our Neutral call due to risk arising from: 1) persistent weak demand for PCs; 2) Overcapacity that will put downward pressure on average selling prices and ultimately margins; and 3) weaker-than-expected consumer spending due to the austerity measures in the Euro zone and uneven economic recovery in the U.S.
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Par Value: 0.50 Major Industry: Electronics Sub Industry: Parts & Components SIC Industry Code: 3674 - Semiconductors And Related Devices
UNISEM (M) BERHAD is a semiconductor packaging and test services provider in Malaysia. It’s main semiconductor packaging and test facilities are located in Ipoh, Perak, Malaysia.
It also has factory locations in Wales, United Kingdom; Chengdu, People’s Republic of China; Batam, Indonesia and The United States. Unisem group offers an integrated suite of packaging and test services, such as wafer bumping, wafer probing, wafer grinding, a range of leadframe and substrate integrated circuits packaging, wafer level chipscale packaging and radio frequency, analog, digital and mixed-signal test services.
Its turnkey services include design, assembly, test, failure analysis, and electrical and thermal characterization.
It has a customer base comprising primarily fabless companies (85%) and
integrated device manufacturers (15%).
About 54% of its sales are to customers in North America,
32% to Europe and
14% to Asia.
In July 2007, it acquired Advanced Interconnect Technologies Limited.
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