RBC Capital chip analyst Mahesh Sanganeria this morning turned “incrementally cautious” on the semiconductor sector, “based on incremental negative data points from channel checks.”
“Driven by end demand weakness in several segments including networking, white-box handset and TVs in Europe as well as China, semiconductor inventories in Asia [distributors] have ticked up to [an] undesirable level, according to our checks,” he writes in a research note.
So far, he adds, semi companies may not have seen push-outs or cancellations as the inventory can be worked through during seasonal build season in the third quarter. “If the demand in Europe and China remains at depressed levels, we expect push-outs or cancellation in Mid-July time frame,” he adds. “We believe comm segment remains robust and the brightest spot in the channel is for Apple products, which has seen a strong uptick in forecast compared to just two weeks back.”
Sangameria says supply chain checks find Apple has increased its build forecast compared to a few weeks ago. He contends iPad forecasts have been increased by about 25%, while forecast for other Apple products have been increased by about 10%.
The SOX today is down 1.72, or 0.5%, to 359.67.
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