TA Securities maintains Underweight on semicon sector, cites weaker recovery

Business & Markets 2013
Written by Charlotte Chong of the edgedaily.com
Tuesday, 07 May 2013 12:00
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KUALA LUMPUR (MAY 7): TA Securities has maintained its
Underweight rating on the semiconductor industry due to its weak
sales recovery and believed that the industry was picking up in a
slower pace.
TA Securities said in its note today that UNISEM (M) BHD [] had
provided guidance that 2Q13 would be challenging and the revenue
was expected to drop year-on-year but improve quarter-on-quarter,
due to seasonal effect.
“MALAYSIAN PACIFIC INDUSTRIES [] Bhd is more optimistic on results
performance and has guided at least 10% quarter-on-quarter growth
in 2013,” said the research house.
It said: “Whatever it is, we believe the industry is in the midst of
recovery, albeit slow.”
The expected recovery in sales is not without risks, it added.
“The concern over the automatic spending cut or “sequestration” in the US may shave global demand as US sales
accounted for 20% of global chips sales.”
“We expect the sales to pick up strongly in 2H13 with the recovery in global economic condition, assuming the jittery over
the automatic spending cut in the US turns out to be a non-event to economic growth,” said the research house.
The research house also expected that monthly sales to surge above US$24 billion in April and May 2013, driven by new
product launch (Samsung Galaxy S4) and recovery in personal computer (PC) sales.
TA Securities commented that the PC market would make a comeback from June 2013 onwards when Intel officially
launches Haswell CPU on June 3, 2013.