Bad signs
1. Prices to rise in analog? Berger of FBR said: ''Note that we already raised financial estimates on Fairchild Semiconductor and International Rectifier as these companies preannounced 4Q results positively over the past few weeks. Given channel strength and the potential for distributor inventory replenishment in 1Q10, we think that these discrete and lower margin analog chip vendors can raise prices on some products to some customers in early 2010.''
2. Application processor war is coming. Freedman of Broadpoint AmTech said: ''While application processors see huge growth with smartphones, we do not seek out investment as it may turn into profitless growth. Numerous emerging competitors (Qualcomm, Nvidia, Broadcom, NXP, ST Micro and MediaTek), eager to take share from established vendors (TI, Marvell), could turn price aggressive as they continue to invest tremendous amounts in ecosystems for their particular application processor development environments. We see parallels to baseband, given the high volumes and minimal barriers to entry of this attractive wireless growth market.''
3. Touch screens notebooks not taking off yet. Daniel Amir, an analyst with Lazard Capital Markets, said: ''Demand for touch screen notebooks, which were enabled by the debut of Windows 7, is still fairly lackluster. HP expected to ship 80,000 touch screen notebooks every month, but current demand is only 1,500 notebooks a month. Higher prices for the capacitive touch screen panels are posing a challenge to mass adoption of touch screen enabled notebooks. We believe that we have yet to reach a high adoption rate because of the lack of touch applications that are targeted to the PC market. We believe that the touch PC concept will begin to have higher adoption rates in late 2010.''
4. NOR is a bore. Analysts from Gartner said: ''NOR flash pricing showed mixed results in December. Most densities saw prices gently increase, while 512Mb declined by 3.8 percent. Although NOR flash contract pricing was flat because of a temporary shortage, we continued to see a NOR flash/pseudo SRAM MCP pricing decline. Gartner expects NOR flash pricing in the first quarter of 2010 to remain flat or post a mild decline. However, since the application of NOR flash is limited and most smartphones will use a NAND flash solution, the overall revenue from NOR flash will continue to decline in 2010.''
5. Fab tool downturn continues. Freedman of Broadpoint AmTech said: ''Maturing 300-mm fab assets will continue to drive unit costs lower (and faster than ASP declines) as process upgrades are less capital intensive. As such, we believe the foundry build-out opportunity in 300-mm will be among the best investments for semiconductor corporations in the past decade. However, this is likely a negative for capital equipment manufacturers on efficiencies from re-use and longevity of equipment.''
6. Backend capacity remains tight at Amkor and others. C.J. Muse, an analyst at Barclays Capital, said: ''Amkor raised its guide for 4Q based on broad-based demand. Focus remains on 1Q10 outlook where we expect better than seasonal guide for 1Q10 led by still tight OSAT capacity.''
7. More backend woes. Amir of Lazard Capital Markets said: ''Our contacts have indicated that we are seeing back-end capacity tightening and that it could be a challenge for semiconductor companies to increase shipment volumes beyond the current run rate. According to our channel checks, tight Amkor capacity may drive the company to break its delivery commitments. Major clients of Amkor include Toshiba, Numonyx, Qualcomm, Broadcom, Conexant, and Marvell.''
8. Solar shakeout hits. Robert Castellano, president of The Information Network, said: ''We forecast that in 2010 as many as 50 percent of the more than 200 solar manufacturers, mired in red ink with current selling prices above $2.00 per watt, may not survive. The freefall has begun.''
9. Chinese firms ride vertical integration to solar cost leadership. Henning Wicht, senior director and principal analyst at iSuppli, said: "Yingli and Trina, along with U.S.-based First Solar Inc. represent the most notable success stories in the PV market today. In the price-driven environment of 2009, vertical integration provides the scale and control needed to contain costs, and to provide a competitive edge."
10. Netbooks to slow? John Jacobs, an analyst at DisplaySearch, said: ''Mini-notes continue to be a significant piece of the notebook PC pie, in terms of both units and revenue. However, our long-term outlook is that the mini-note share of the notebook PC market has stabilized, and will remain at approximately 20 percent through 2011 before starting to erode. While mini-notes offer lower ASPs and are thinner and lighter than notebook PCs, the performance of larger notebook PCs continues to improve while prices continue to steadily decline, increasing the performance gap while narrowing the price gap. In 2010, DisplaySearch expects the notebook PC market to grow by 16 percent, with higher than average growth for mini-notes and ultra-portable notebook PCs. Growth in the latter segment is expected to be fueled by numerous new 11.6-inch and 12.0-inch products built on CULV platforms and with aggressive, sub-$500 ASPs.''
Source: EE times
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