With the nation's semiconductor industry experiencing a gradual recovery, Merrill Lynch named Advanced Semiconductor Engin-eering Inc (ASE, 日月光半導體), MediaTek Inc (聯發科技), and United Microelectronics Corp (UMC, 聯電) as its top picks, citing their strong growth.
The semiconductor industry grew by 3 percent last month from May, above the seasonal average of 1 percent, Merrill Lynch said in a monthly report released yesterday.
Dynamic random access memory and outsourced semiconductor assembly and test showed a sharp recovery last month, reporting 16 percent and 7 percent month-on-month growth, respectively. Foundry and fabless both recovered to seasonal growth rates of 3 percent and 2 percent month-on-month, respectively, the report said.
ASE, the world's top semiconductor testing and packaging services provider, showed resilient growth last month with sales rising 10.3 percent from May. This is attributable to a lower base after a fire at its Chungli (中壢) factory May. Although the company suffered huge losses in the fire, it secured growth from GSM handset chips, Bluetooth and Sony's PlayStation Portable, the report said.
Chip designer MediaTek Inc was praised for its better result despite the slow season. It reported sales of NT$3,391 million (US$106 million) last month, up 11.1 percent from a year ago.
"Looking into July, under the hot season effect of personal computers, DVD players and handset-related IC [integrated circuits], we expect MediaTek to show 6 percent month-on-month growth to NT$3,600 million," the report said.
UMC, the world's second largest contract chipmaker, saw 2.1 percent growth in sales last month from May. As Texas Instruments is likely to increase orders for the third quarter and UMC continues to benefit from customer success and rising penetration in liquid-crystal-display (LCD) TVs and DVD recorders, the research house anticipates that the company's third quarter sales should rise by 12 percent from the previous year. Merrill Lynch also maintained its "neutral" recommendation on Powerchip Semiconductor Corp (力晶半導體) and reiterated its cautious stance on Nanya Technology Corp (南亞科技).
In another report, it said that hardware supply chain revenues picked up slightly last month after two consecutive months of weaker sales. Total earnings for the sector, including motherboards, chipsets, PC peripherals and laptops, reached 16 percent growth year-on-year to NT$330 billion last month.
RSS