Tuesday, November 30, 2004
The three-month average of monthly global chip sales for October 2004 was in line with the expectations of analysts at SG Cowen & Co., leading the company to stick with its predictions for a weak first half of 2005 and annual chip market growth of 10 percent.
"We are projecting that industry utilization will decline from 93 percent in Q3:04 to 80 percent by year end. We expect a recovery to begin in Q3:05," the analyst said in a note sent out Monday (Nov. 29).
"Our projections are based on unit supply growth of 16 percent in '04 and 14 percent in '05. We assume MOS unit demand increases 22 percent in '04 and 11 percent in '05."
The analyst went on to say that when manufacturing capacity utilization falls this rapidly, the pricing of semis declines as well. As a result SG Cowen predicted that average selling prices would decline sequentially in both Q1 and Q2 of 2005.
"We continue to project 28 percent revenue growth for 2004 and 10 percent for 2005," the analyst concluded.
By: DocMemory
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