Technology: Chip Analysts Say July Sales Data Show the Downturn Isn’t Over - China's surplus with the US may exacerbate - PressFrom - US

TechnologyChip Analysts Say July Sales Data Show the Downturn Isn’t Over

20:50  03 september  2019
20:50  03 september  2019 Source:

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(Bloomberg) -- Semiconductor companies continue to struggle with weak demand and high inventory levels, analysts wrote, citing the latest month of industry sales data.

Total semiconductor sales fell about 15% on a year-over-year basis in July, according to the brokerages, which cited data from the Semiconductor Industry Association. That followed a drop of 17% in June, and May’s 15% decline.

The report shows that “we remain deep in a semiconductor downturn,” wrote David Wong, an analyst at Nomura Instinet. The report “is in line with the muted forward guidance given over the last six weeks by several chip companies that we consider to be broad indicators for many chip end markets.”

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Both Citi and Morgan Stanley wrote that the data were below their own forecasts for the month. Citi trimmed its full-year estimate for total semiconductor sales, to $409.9 billion from $410.7 billion.

Morgan Stanley blamed the weak July on a “sharp reversal” in memory-chip sales, which “more than offset strength in logic” chips.

“Broader semis remain weak, given end-demand challenges nearly everywhere,” analyst Joseph Moore wrote to clients.

Longbow Research wrote that it saw “no 2H demand rebound” for semiconductor companies, referring to the second half of the year. Analyst Shawn Harrison added that consensus forecasts for the fourth quarter looked “overly bullish.”

The Philadelphia Semiconductor Index fell as much as 2.2% on Tuesday. In addition to the SIA data, which was released over the holiday weekend, the industry was pressured by the latest escalation of trade tensions between the U.S. and China, as more tariffs were levied on both nation’s goods effective Sept. 1. The industry benchmark is down nearly 9% from a recent peak in late July.

Are Chip, Joanna Gaines Thinking of Baby No. 6?

Are Chip, Joanna Gaines Thinking of Baby No. 6? The more, the merrier? Chip Gaines joked about adding baby No. 6 to his and Joanna Gaines’ brood. Relive Chip and Joanna Gaines’ Best Quotes About Family and Parenthood “There’s a running joke with the people that run in our circles where any time things are going well between Joanna and I, at the end of that statement, I’ll sarcastically say — used to be sarcastically — ‘No. 5, No. 5,’” the Capital Gaines author, 44, said at the Chip & Joanna Gaines Spotlight at Inbound 2019 on Friday, September 6. “Well, now we’ve got five children. So now, sarcastically, I would say, ‘No. 6, No. 6,’ when things were going well.

Chip Analysts Say July Sales Data Show the Downturn Isn’t Over© Bloomberg The latest data pointed to ongoing demand issues

Chipmakers have had a high correlation to the trade issue, as not only do many companies in the industry derive much of their revenue from China, but the country is a key part of their supply chains as well.

Among specific stocks, Texas Instruments Inc., Nvidia Corp. and Advanced Micro Devices fell as much as 2.5% on Tuesday. Broadcom Inc. shed 3.7% intraday.

Following the months of weak sales data, RBC Capital Markets suggested that the industry could be nearing a bottom. “Given the severity of the decreases, we think downside from here is limited,” analyst Mitch Steves wrote, referring specifically to declines in memory chips.

Also on Tuesday, Evercore ISI upgraded a trio of chipmakers; the firm sees “continued positive earnings revisions leading shares higher into year-end and beyond.” Both KLA Corp. and Lam Research Corp. were lifted to outperform from in-line while memory-chip maker Western Digital was upgraded to in-line from underperform.

To contact the reporter on this story: Ryan Vlastelica in New York at

To contact the editors responsible for this story: Catherine Larkin at, Scott Schnipper

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©2019 Bloomberg L.P.

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China's Huawei reports sales gain despite US sanctions .
BEIJING (AP) — Chinese tech giant Huawei on Wednesday reported a double-digit gain in sales despite U.S. sanctions that threaten to disrupt its smartphone and network equipment businesses. Huawei Technologies Ltd. said its sales rose 24.4% in the first nine months of 2019 to 610.8 billion yuan ($86 billion). That was faster than the 23.2% gain reported for the first half. The announcement followed U.S.-Chinese trade talks in Washington that ended Friday with no word of progress on resolving Huawei's status.The Trump administration, which accuses Huawei of being a security risk, imposed curbs in May on its access to U.S.

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