After toughing out "the worst recession the semiconductor industry has seen since its inception", things are going the way of the semi manufacturers. Strengthening consumer confidence, a growing global economy and reported increase in corporate spending have helped push the sector into positive earnings and that continued profit could have the same effect on portfolios.
Positive Circuits
Semiconductor sales fell more than 9% throughout 2009, but analysts are now predicting a wave of nearly 20% growth in sales for the sector in 2010. Consumers are parting with their hard-earned dollars in the tech sector. Research firm IDC, reports that shipments of personal computers have risen by 24% in the past quarter. The rise in e-book readers popularity, such as Amazon's (NASDAQ: AMZN) Kindle, are also having positive effects. Global e-book reader shipments are predicted to increase from 700,000 units in 2008 to more than 28 million units by 2013. Also the push for consumers to be more "green" could help the semi industry profit. As consumers buy more energy efficient appliances, the more complex the chip sets need to be in performing their functions.
The average age of a computer in corporate America is nearly five years old. While companies reduced IT spending during the downturn, these older machines are at the point where it becomes more costly to keep them running rather than buy new. Tech companies are typically one of the first recipients of increased corporate spending as their products or services help increase efficiency and growth. Analysts predict that CAPEX spending will rise by over 14% in the coming year.
The contract prices of 12-inch wafers grew 10% in the fourth quarter of 2009, 5% in the first of 2010 and the Semiconductor Industry Association announced that February sales increased 56% year-over-year. Both Texas Instruments (NYSE: TXN) and LSI (NYSE:LSI) raised their guidance, and tech bell-weather Intel (NASDAQ: INTC) reported soaring earnings, topping estimates by 13.2%.
A Chipper Portfolio
The semiconductor industry is one of a cyclical nature. While Intel's blowout earnings have caused the overall sector to spike over the past few days, it's not too late to ride the next wave in the sector. A growing global economy and increased tech spending should keep the upsurge going. Exchange-traded funds (ETFs) can provide an easy way to own a basket of various semi manufacturers with the ease of holding a single ticker.
The iShares S&P North American Tech-Semiconductors (NYSE: IGW) is the second largest ETF in the sector based on assets, and holds 52 stocks. This includes an 8.5% weighting towards Intel. The equal-weighted SPDR S&P Semiconductor (NYSE: XSD) might be a better choice for investors with its lower expense ratio and more concentrated 27 stock portfolio. The SPDR's portfolio has outperformed IGW over the last year ending in March, by nearly 16%. The SPDR charges 0.35% in expenses.
The most heavily traded choice in the sector is the Semiconductor HOLDRs (NYSE: SMH). The Holding Company Depositary Receipts is made up of a basket of stocks that never get rebalanced or reconstituted. The current mix contains 18 stocks, including Analog Devices (NYSE:ADI) and Applied Materials (NASDAQ: AMAT). The HOLDRs' interesting structure could be a boon or bust depending on the sector it tracks - just ask investors in the B2B Internet HOLDRs (NYSE: BHH). SMH trades in units of 100 and can be unbundled into the individual stocks. Investors get to keep the voting and dividend rights of the underlying stocks.
Bottom Line
Things are looking quite chipper in the semiconductor sector going forward. The semis are poised to capitalize on the growing global trends and increases in corporate and personal spending. Recent knockout earnings from a few of the leaders in the sector have helped point the way for the next bull market cycle in the sector. Adding a dose of chips to a portfolio via ETFs will help investors cash in on this growth. (For related reading, take a look at Technology Sector Funds.)
Source : http://stocks.investopedia.com
Sunday, April 25, 2010
Saturday, April 24, 2010
Budget deficit countries ....
Iceland : 14.3 (IMF bailout completed)
Greece : 13.6 ( IMF bailout in progress )
Spain : 11.2
Portugal : 9.4
China : 2.2
Which country will be next ?
Greece : 13.6 ( IMF bailout in progress )
Spain : 11.2
Portugal : 9.4
China : 2.2
Which country will be next ?
Friday, April 23, 2010
US New Home Sales Surge 27%, Blowing Past Estimates
Sales of new homes surged 27 percent last month, bouncing off the previous month's record low and blowing past expectations as better weather and government incentives boosted sales.
AP
New home sales rose 26.9 percent in March.
________________________________________
The Commerce Department said new home sales rose in March to a seasonally adjusted annual sales pace of 411,000.
It was the strongest month since last July and the biggest monthly increase in 47 years.
Economists surveyed by Thomson Reuters had expected a sales pace of 330,000.
February's results were revised upward to 324,000, but remained an all-time low. Sales had been especially weak over the winter, partly due to bad weather in much of the country.
Source CNBC ....
Look out for timber related industry !!
AP
New home sales rose 26.9 percent in March.
________________________________________
The Commerce Department said new home sales rose in March to a seasonally adjusted annual sales pace of 411,000.
It was the strongest month since last July and the biggest monthly increase in 47 years.
Economists surveyed by Thomson Reuters had expected a sales pace of 330,000.
February's results were revised upward to 324,000, but remained an all-time low. Sales had been especially weak over the winter, partly due to bad weather in much of the country.
Source CNBC ....
Look out for timber related industry !!
Thursday, April 22, 2010
Malaysia Furniture exports to hit RM9bil this year
GEORGE TOWN: The Malaysian Furniture Entrepreneurs Association (MFEA) expects revenue from furniture exports to hit RM9bil this year.
MFEA president Lor Lean Sen said the industry was unlikely to meet the Government’s RM10bil target this year as the global economy was still soft.
Lor Lean Sen ... ‘The world economy is still recoveri ng, so RM9bil is a more realistic target for this year.’
“In 2008, export revenue was RM8.7bil. It dropped to about RM8bil last year due to the economic crisis. The world economy is still recovering, so RM9bil is a more realistic target for this year,” he told StarBiz.
About 20% of MFEA’s 3,000 members are involved in the manufacturing and export business.
The industry’s main export markets are the US, Japan, Europe, Australia and the Middle East.
Lor said business was picking up again for the industry.
“We estimate that RM500mil worth of sales were concluded at the recent Export Furniture Exhibition in Kuala Lumpur, which is about 30% higher than last year,” he said.
MFEA advisor Cha Hoo Peng said the wood-based furniture manufacturing business in Malaysia had picked up over the past six months.
He said it was now becoming expensive to manufacture furniture in China due to rising labour costs and the country’s need to import raw materials.
“Malaysian-made wood-based furniture are competitively priced in the international market, ranging between RM1,000 and RM1,500 per set. This is about 5% higher than the pricing in January.
Ooi Ah You says automation will help Green Continental Furniture to reduce dependency on foreign workers by 15% to 20%.
“Even if rubberwood prices go up in future, the margin of increase in selling prices will still be around 5%,” he said.
However, Cha said China was still competitve in the steel furniture segment.
“This is because China is a large producer of steel. This enables manufacturers to price their steel furniture much more competitively than Malaysia,” he said.
Green Continental Furniture Sdn Bhd, an original design manufacturer, expects revenue to grow by about 15% to RM130mil this year.
Executive director Ooi Ah You said the company would invest between RM2mil and RM3mil this year to automate its manufacturing facilities in Kulim Industrial Estate and China.
“This will reduce our dependency on foreign workers by 15% to 20%,” he said. The company employs about 900 workers, of which 300 are foreigners.
Penang-based Omega Sdn Bhd, a sofa manufacturer, expects to produce some 1,500 sofas per month by mid-2010.
Managing director Michael Chew said “the increase in production is to meet rising orders from our customers in Australia, Europe and the Middle East.”
Chew said the company exported over 70% of its products while 30% were sold in the domestic market.
He said the sofas were priced between US$300 and US$1,000 in the international market, depending on the grade and quality of the leather.
MFEA president Lor Lean Sen said the industry was unlikely to meet the Government’s RM10bil target this year as the global economy was still soft.
Lor Lean Sen ... ‘The world economy is still recoveri ng, so RM9bil is a more realistic target for this year.’
“In 2008, export revenue was RM8.7bil. It dropped to about RM8bil last year due to the economic crisis. The world economy is still recovering, so RM9bil is a more realistic target for this year,” he told StarBiz.
About 20% of MFEA’s 3,000 members are involved in the manufacturing and export business.
The industry’s main export markets are the US, Japan, Europe, Australia and the Middle East.
Lor said business was picking up again for the industry.
“We estimate that RM500mil worth of sales were concluded at the recent Export Furniture Exhibition in Kuala Lumpur, which is about 30% higher than last year,” he said.
MFEA advisor Cha Hoo Peng said the wood-based furniture manufacturing business in Malaysia had picked up over the past six months.
He said it was now becoming expensive to manufacture furniture in China due to rising labour costs and the country’s need to import raw materials.
“Malaysian-made wood-based furniture are competitively priced in the international market, ranging between RM1,000 and RM1,500 per set. This is about 5% higher than the pricing in January.
Ooi Ah You says automation will help Green Continental Furniture to reduce dependency on foreign workers by 15% to 20%.
“Even if rubberwood prices go up in future, the margin of increase in selling prices will still be around 5%,” he said.
However, Cha said China was still competitve in the steel furniture segment.
“This is because China is a large producer of steel. This enables manufacturers to price their steel furniture much more competitively than Malaysia,” he said.
Green Continental Furniture Sdn Bhd, an original design manufacturer, expects revenue to grow by about 15% to RM130mil this year.
Executive director Ooi Ah You said the company would invest between RM2mil and RM3mil this year to automate its manufacturing facilities in Kulim Industrial Estate and China.
“This will reduce our dependency on foreign workers by 15% to 20%,” he said. The company employs about 900 workers, of which 300 are foreigners.
Penang-based Omega Sdn Bhd, a sofa manufacturer, expects to produce some 1,500 sofas per month by mid-2010.
Managing director Michael Chew said “the increase in production is to meet rising orders from our customers in Australia, Europe and the Middle East.”
Chew said the company exported over 70% of its products while 30% were sold in the domestic market.
He said the sofas were priced between US$300 and US$1,000 in the international market, depending on the grade and quality of the leather.
Friday, April 16, 2010
Traditional Chinese Medicine ...
Christian Hogg, CEO of Chi-Med says that China's traditional medicine industry is experiencing strong growth and his firm is focused on developing such botanical drugs for the the U.S. and European markets. He talks to Han De Jong of ABN Amro Private Banking and CNBC's Martin Soong and Karen Tso.
http://www.cnbc.com/id/15840232?video=1468344304&play=1
http://www.cnbc.com/id/15840232?video=1468344304&play=1
Thursday, April 15, 2010
KFC earnings ... grow in China , reversing in US
Yum Brands Beats Estimates as China Sales Jump
Yum Brands reported first-quarter earnings and revenue that exceeded Wall Street projections, pushed higher by an improving business picture in China.
The Louisville, Ky.-based restaurant chain said it earned 59 cents a share excluding one-time items in its first-quarter, compared with 48 cents a share this time last year.
Sales for the most recent quarter reached $2.35 billion, up from $2.22 billion in the same period last year.
Analysts who follow the company projected Yum earning 53 cents a share on sales of $2.26 billion.
Shares of Yum rose more than 3 percent in extended trading Wednesday. Get after-hour quotes for Yum Brands here.
The company's stock [YUM 41.68 0.52 (+1.26%) ] finished the regular New York Stock Exchange session at $41.68. Volume exceeded 7.8 million shares before the closing bell.
Yum's net income, which includes one-time charges and other items, rose to $241 million, or 50 cents per share, from $218 million, or 46 cents per share, a year earlier.
Yum's worldwide operating profit grew 13 percent prior to foreign currency translation, including a 37 percent surge in China and 2 percent international growth. However, the results were offset by a 9 percent decline in the U.S.
"We are particularly pleased with our business in China, which reported robust profit growth of 37 percent—this was driven by new unit growth of 14 percent and same-store-sales growth of 4 percent," David Novak, CEO of Yum, said in a prepared statement.
"We now have over 3,500 restaurants in China, strengthening our leading position in the world's largest growth market," he continued. "We expect to further that lead by opening about 500 new restaurants in China this year."
In the United States, profits were down 9 percent and same-store-sales declined 1 percent.
source : CNBC
Yum Brands reported first-quarter earnings and revenue that exceeded Wall Street projections, pushed higher by an improving business picture in China.
The Louisville, Ky.-based restaurant chain said it earned 59 cents a share excluding one-time items in its first-quarter, compared with 48 cents a share this time last year.
Sales for the most recent quarter reached $2.35 billion, up from $2.22 billion in the same period last year.
Analysts who follow the company projected Yum earning 53 cents a share on sales of $2.26 billion.
Shares of Yum rose more than 3 percent in extended trading Wednesday. Get after-hour quotes for Yum Brands here.
The company's stock [YUM 41.68 0.52 (+1.26%) ] finished the regular New York Stock Exchange session at $41.68. Volume exceeded 7.8 million shares before the closing bell.
Yum's net income, which includes one-time charges and other items, rose to $241 million, or 50 cents per share, from $218 million, or 46 cents per share, a year earlier.
Yum's worldwide operating profit grew 13 percent prior to foreign currency translation, including a 37 percent surge in China and 2 percent international growth. However, the results were offset by a 9 percent decline in the U.S.
"We are particularly pleased with our business in China, which reported robust profit growth of 37 percent—this was driven by new unit growth of 14 percent and same-store-sales growth of 4 percent," David Novak, CEO of Yum, said in a prepared statement.
"We now have over 3,500 restaurants in China, strengthening our leading position in the world's largest growth market," he continued. "We expect to further that lead by opening about 500 new restaurants in China this year."
In the United States, profits were down 9 percent and same-store-sales declined 1 percent.
source : CNBC
Soros - 8 years to go before the next crash…
Railway porter-turned-billionaire financier George Soros delivered a stark warning last night that the financial world is on the wrong track and that we may be hurtling towards an even bigger boom and bust than in the credit crisis.
The man who ‘broke’ the Bank of England (and who is still able to earn a cool $3.3 bln in a year) said the same strategy of borrowing and spending that had got us out of the Asian crisis could shunt us towards another crisis unless tough lessons are learned.
Soros, who worked as a porter to pay for his studies at the London School of Economics after emigrating from Hungary, warned us to heed the lesson that modern economics had got it wrong and that markets are not inherently stable.
“The success in bailing out the system on the previous occasion led to a superbubble, except that in 2008 we used the same methods,” he told a meeting hosted by The Economist at the City of London’s modern and impressive Haberdashers’ Hall.
“Unless we learn the lessons, that markets are inherently unstable and that stability needs to the objective of public policy, we are facing a yet larger bubble.
“We have added to the leverage by replacing private credit with sovereign credit and increasing national debt by a significant amount.”
One crumb of comfort could be the 10-year period between the 1998 Asian crisis and the 2008 credit crisis. If the pattern is repeated, it should at least mean we have another 8 years to go before the next crash…
source : Reuter
The man who ‘broke’ the Bank of England (and who is still able to earn a cool $3.3 bln in a year) said the same strategy of borrowing and spending that had got us out of the Asian crisis could shunt us towards another crisis unless tough lessons are learned.
Soros, who worked as a porter to pay for his studies at the London School of Economics after emigrating from Hungary, warned us to heed the lesson that modern economics had got it wrong and that markets are not inherently stable.
“The success in bailing out the system on the previous occasion led to a superbubble, except that in 2008 we used the same methods,” he told a meeting hosted by The Economist at the City of London’s modern and impressive Haberdashers’ Hall.
“Unless we learn the lessons, that markets are inherently unstable and that stability needs to the objective of public policy, we are facing a yet larger bubble.
“We have added to the leverage by replacing private credit with sovereign credit and increasing national debt by a significant amount.”
One crumb of comfort could be the 10-year period between the 1998 Asian crisis and the 2008 credit crisis. If the pattern is repeated, it should at least mean we have another 8 years to go before the next crash…
source : Reuter
TSMC "forecast on Global Chip Sales to Increase 22% in 2010"
Top contract chipmaker Taiwan Semiconductor Manufacturing (TSMC) said it expects global sales of semiconductors to rise 22 percent this year and 7 percent next amid a recovery from last year's slump.
The forecast was given by Chairman Morris Chang at a company technology symposium held in the U.S. on April 13. Details of the speech were given to reporters in Taipei in a teleconference with company spokesman J.H. Tzeng on Wednesday.
Chang said the growth outlook for the semiconductor market this year and next year was healthy, while annual growth would slow to 4.2 percent in 2011-2014, partly as other new key components such as touch-screen panels are used in electronics products.
His forecast for this year is largely in line with market expectations.
Global semiconductor revenue in 2010 is set to reach $279.7 billion, up 21.5 percent from 2009, according to research firm iSuppli Corp. Gartner forecast worldwide semiconductor revenue growth at 20 percent this year.
TSMC, which counts Texas Instruments [TXN 26.90 1.03 (+3.98%) ] and Nvidia [NVDA 17.88 0.22 (+1.25%) ] among its clients, reported unconsolidated sales of T$30.82 billion ($975 million) for last month, more than double a year earlier and up 5.6 percent from February.
TSMC and No.2 chip foundry United Microelectronics Corp. (UMC) have said they would boost capital spending significantly this year to tap demand for new computers, cellphones and flat-screen TVs that require more powerful microchips.
But analysts say a wider customer base and early adoption of more advanced technology would help TSMC yield higher profit margins than UMC and other smaller rivals in coming months.
In a separate statement released by TSMC on Wednesday, the company said it would start using more advanced 20-nanometre process chip production technology in the second half of 2012.
Sales of microchips made by 65-nanometre technology, or 65 billionths of a meter, accounted for 30 percent of TSMC's total sales in the fourth quarter of 2009, while 9 percent of its sales came from advanced 40-nano technology in the same quarter.
The smaller circuitry allows for more powerful chip designs. Squeezing more circuits onto a single chip also increases chip yield per wafer, boosting
Source : Reuter
The forecast was given by Chairman Morris Chang at a company technology symposium held in the U.S. on April 13. Details of the speech were given to reporters in Taipei in a teleconference with company spokesman J.H. Tzeng on Wednesday.
Chang said the growth outlook for the semiconductor market this year and next year was healthy, while annual growth would slow to 4.2 percent in 2011-2014, partly as other new key components such as touch-screen panels are used in electronics products.
His forecast for this year is largely in line with market expectations.
Global semiconductor revenue in 2010 is set to reach $279.7 billion, up 21.5 percent from 2009, according to research firm iSuppli Corp. Gartner forecast worldwide semiconductor revenue growth at 20 percent this year.
TSMC, which counts Texas Instruments [TXN 26.90 1.03 (+3.98%) ] and Nvidia [NVDA 17.88 0.22 (+1.25%) ] among its clients, reported unconsolidated sales of T$30.82 billion ($975 million) for last month, more than double a year earlier and up 5.6 percent from February.
TSMC and No.2 chip foundry United Microelectronics Corp. (UMC) have said they would boost capital spending significantly this year to tap demand for new computers, cellphones and flat-screen TVs that require more powerful microchips.
But analysts say a wider customer base and early adoption of more advanced technology would help TSMC yield higher profit margins than UMC and other smaller rivals in coming months.
In a separate statement released by TSMC on Wednesday, the company said it would start using more advanced 20-nanometre process chip production technology in the second half of 2012.
Sales of microchips made by 65-nanometre technology, or 65 billionths of a meter, accounted for 30 percent of TSMC's total sales in the fourth quarter of 2009, while 9 percent of its sales came from advanced 40-nano technology in the same quarter.
The smaller circuitry allows for more powerful chip designs. Squeezing more circuits onto a single chip also increases chip yield per wafer, boosting
Source : Reuter
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