Analyst: Q3 wafer starts remaining stable

By Dylan McGrath, EE Times -- EDN, September 7, 2011

SAN FRANCISCO—Third quarter wafer production starts for semiconductor firms remain mostly stable after significant cuts two months ago, according to a Wall Street analyst.

Craig Berger, an analyst with FBR Capital Markets, said in a report circulated Tuesday (September 6) said the results of wafer start production checks come on the back of large, widespread production cuts by semiconductor firms in mid-July, which as the time indicated that the sluggish global macro economy was impacting semiconductor demand and production trends.

"For Q3 2011, aggregate production starts were generally unrevised versus our checks four weeks ago, a positive given the weak global macroeconomic environment and a supply chain that has clearly 'stepped on the brakes' as it aims to hold less inventory," Berger wrote.

Early check into fourth quarter wafer start plans show an overall decrease of 2% compared to the third quarter, Berger said. But Qualcomm Inc, Altera Corp, Xilinx Inc, and Broadcom Corp are all planning sequential production increases, Berger said.

Taiwan's Mediatek Inc has increased its third quarter production starts by 3% versus its plans in mid-July, according to Berger, who said Mediatek increased production in advance of handset builds for China's Golden Week holiday, which begins October 2. Mediatek's third quarter wafer starts are likely to be up 4% compared to the second quarter, Berger said.

On the flip side, Nvidia Corp's third quarter production starts are tracking at 2% lower than they were in mid-July, due to continuing weakness in PC demand, according to Berger. Overall, Nvidia's third quarter production starts are likely to be down about 24% compared with the second quarter, Berger said.

Currently, Berger believes that Silicon Laboratories Inc's third quarter wafer starts will be up 33% compared to the second quarter, while Marvell Technology Group Ltd's production starts are expected to be up 24% sequentially. LSI Corp and Altera Corp are likely to increase production starts by 11% and 6%, respectively, compared to the second quarter, Berger said.

In addition to Nvidia, other chip firms that are likely to experience significant sequential declines in wafer production starts include Texas Instruments Inc (down 21%), Broadcom (down 14%), Xilinx (down 8%), Advanced Micro Devices Inc (down 5%), and Qualcomm (down 3%), Berger said.

This story was originally posted by EE Times.