Global Semiconductor_SIA Data_ October Below Seasonal

Summary of Global Semiconductor Conference Call Industry Overview - The report focuses on the Global Semiconductor industry, highlighting sales performance and market trends for October 2024 and projections for the coming years [2][4]. Key Points and Arguments 1. Sales Performance: - Total semiconductor sales decreased by 13.0% month-over-month (M/M) in October, which is approximately 530 basis points worse than normal seasonal averages [2][4]. - Only the logic segment saw a 4.4% M/M growth, while other sub-markets experienced contractions [2][4]. - Excluding memory, integrated circuit (IC) revenue dropped by 3.0% M/M, aligning with the 10-year seasonal average but 200 basis points below the 5-year average [2][4]. 2. Segment Performance: - Microcontroller Units (MCU), Digital Signal Processors (DSP), and Analog segments posted declines of 29.5%, 28.7%, and 12.9% M/M, respectively, all significantly worse than the 10-year seasonal averages [2][4]. - Memory sales fell by 31.4% M/M, driven by a 35% sequential drop in units, partially offset by a 6% sequential increase in average selling price (ASP) [2][4]. 3. Year-over-Year (Y/Y) Growth: - Y/Y growth in total semiconductor sales was +12.4%, which is 620 basis points better than the 10-year average, but a deceleration from an average of ~20% Y/Y growth in Q3 [2][4]. - Excluding memory, IC revenue increased by 8.3% Y/Y, approximately 150 basis points higher than the 10-year average [2][4]. 4. Forecast Adjustments: - The semiconductor forecast was trimmed due to lowered expectations for Analog and MCU revenue, alongside anticipated pricing declines for DRAM and NAND flash [2][4]. - Non-memory semiconductor revenue is projected to grow by +8%, +19%, and +9% Y/Y in 2024, 2025, and 2026, respectively [2][4]. 5. Total Semiconductor Revenue Projections: - Total semiconductor industry revenues are expected to grow 21% Y/Y to US$633 billion** in 2024, rising **24$782 billion in 2025, and trending up 9% Y/Y to US$853 billion in 2026 [2][4]. 6. Preferred Stocks: - In the U.S. market, preferred stocks include AMD, ALGM, ADI, AVGO, ARM, MCHP, MU, NVDA, and TXN, all rated as "Buy" [2][4]. Additional Important Insights - Memory Market Outlook: - The memory segment is expected to face near-term softness but is projected to recover in 2025 [2][4]. - DRAM sales specifically fell by 34.3% M/M, while NAND sales declined by 27.4% M/M [2][4]. - Contract pricing for DRAM is expected to increase by 10% in Q4 2024, while NAND flash ASP is anticipated to decrease by 1% and 4% in Q4 2024 and Q1 2025, respectively [2][4]. - Market Estimates: - Street estimates for total semiconductor revenue for CQ4:24 are set for a 5.9% Q/Q increase, with estimates for revenues excluding memory implying a 4.6% Q/Q increase [2][4]. This summary encapsulates the critical insights from the conference call, providing a comprehensive overview of the current state and future outlook of the semiconductor industry.