Chip giant Qualcomm said that it is seeing a pickup in chip demand. Separately, two chip industry research firms said graphics chips shipments rose in the first quarter.
Qualcomm indicated on Monday that it is encouraged by demand. "We're feeling more comfortable looking forward...We're happy to see chip demand up," CEO Paul Jacobs said during the company's second-quarter earnings conference call. "We're happy to see inventories stabilizing, reaffirming the device demand, we have very strong operating cash flows," he added.
The world's largest maker of cell phone chips had revenue of $2.46 billion, down from the $2.61 billion posted in the same quarter last year, and posted an operating loss of $10 million, reflecting a $748 million charge for litigation settlement related to the settlement and patent agreement with Broadcom.
The sentiment expressed by Qualcomm's CEO adds weight to comments made by Intel earlier this month in its first-quarter earnings conference call. "I believe the worst is now behind us from an inventory correction and demand-level adjustment perspective," Intel CEO Paul Otellini said on April 14.
Reports from market research firms were also positive. On Tuesday, Jon Peddie Research, which tracks the graphics chip market, said shipments were up 3.3 percent from the fourth quarter, "breaking an eight-year seasonal trend that dictated negative sales from Q4 to Q1."
Peddie attributed this, however, to going from nothing to something. "In Q3 and Q4 of 2008 the channel stopped ordering GPUs (graphics processing units) and depleted inventory in anticipation of a long drawn out worldwide recession. But, no recession, no matter how severe, results in zero sales. The world continued to turn and the consumers continued to buy, albeit they bought less," Peddie said in a prepared statement.
Also on Tuesday, Nvidia released information from Mercury Research, another firm that follows chip markets, which said overall graphics chip shipments were up 3.8 percent from the fourth quarter of 2008. The uptick was attributed to improved desktop sales.
Peddie added this cautionary statement. "Things probably aren't going to get back to the normal seasonality till Q3 this year, and we won't hit the levels of 2008 until 2010."
Updated at 10:50 a.m. PST throughout.
Taiwan Semiconductor Manufacturing Co. posted a sharp profit decline of 64 percent on Thursday. This comes after Intel posted a steep dive in profits last week.
TSMC, the world's largest contract chip manufacturer, said its sales sunk to 64.6 billion Taiwan dollars ($1.96 billion) in the fourth quarter of 2008, down 31 percent from the same period last year as well as from the previous quarter.
Net income was NT$12.6 billion in the fourth quarter, down nearly 64 percent from the year-earlier period and 59 percent from the previous quarter. Gross margin, a crucial indicator, was 31.3 percent, down 16.5 percent.
TSMC makes chips for Advanced Micro Devices, Texas Instruments, Nvidia, and Qualcomm, among many other top-tier chip suppliers.
"The global economic recession continues to worsen," said Lora Ho, chief financial officer of TSMC, in a statement. "Customers...continue to pare their inventories aggressively, resulting in a further significant cut back of wafer demand," Ho said.
TSMC CEO Rick Tsai, however, said he is seeing some signs of a bottoming out. "There is some indication that we may be bottoming out in the first quarter (of 2009). The numbers are still not good. I do not want to mislead you. But we believe we are seeing a bottom. But we will need more time and data to confirm this observation," he said.
TSMC expects gross margin to be between one percent and five percent and operating profit margin to decrease between 15 percent and 19 percent in the first quarter and revenue is projected to be between NT$32 billion and NT$35 billion.
More dire forecasts for the chip industry.
On the heels of comments from a chip industry watchdog group last week saying the chip equipment business is "on hold," Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chip manufacturer, said PC-related chip shipments are expected to be off 20 percent in the fourth quarter.
This bodes ill for PC makers, which appear to be cutting way back on chip orders.
"(For) our fourth quarter computer-related wafer shipments...we expect to see over a 20 percent decline. Which is very severe...compared to a seasonal mid-teens percentage growth," said CEO Rick Tsai on Thursday, speaking during the company's earnings announcement.
TSMC is considered an industry bellwether because it makes graphics chips for both Advanced Micro Devices and Nvidia and manufactures a variety of chips that go into cell phones and consumer electronics devices as well as other chips for PCs.
The "supply chain"--the myriad of companies that order chips from TSMC--is "reducing inventory very aggressively," he said.
Because of the state of the world's financial markets, "most our customers are aggressively paring their inventories and have thus reduced significantly their wafer demand," said Lora Ho, VP and chief financial officer of TSMC.
"We believe the foundry sector will likely underperform the overall semiconductor industry in 2009," he said. Foundry refers to a contract chip manufacturer. "In 2009, we now expect the semiconductor industry to decline by mid-to high single digit in 2009. With very little visibility."
TSMC reported a net profit of NT$30.574 billion ($930 million) in the July-September quarter, the company said Thursday. That was slightly higher than NT$30.4 billion reported a year ago.
Chartered Semiconductor, another large contract chip manufacturer, also said on Thursday that it "started to see orders declining from the middle of August, followed by some customer requests to reschedule deliveries forward. The weakness is expected to deepen into the fourth quarter."
The prepared comments continued: "Based on current outlook, we are guiding for Chartered revenues to be down approximately 21 percent sequentially...in the fourth quarter. In line with the demand outlook, we are also reducing our capital expenditure for 2008 to $650 million, which is $100 million lower than the amount we had earlier anticipated."
Samsung Electronics introduced a new ARM-based processor for smartphones at Mobile World Congress 2008 in Barcelona, Spain. The S3C6410 "mobile application processor" includes special hardware accelerators to handle motion video processing and 3D graphics, thereby freeing up the main processor for other tasks and speeding overall performance.
Samsung S3C6400 processor
(Credit: Samsung Semiconductor)At the heart of the S3C6410 is an ARM1176 processor core that can be clocked up to 667MHz. The chip is made on Samsung's advanced 65-nanometer manufacturing process.
By embedding a hardwired Multi Format Codec on-chip, the S3C6410 can perform video capture in MPEG4/H.263/H.264 formats and replay in MPEG4/H.263/H.264/VC1 formats using much less power, thereby giving consumers longer video playback time with a standard size battery, Samsung said. The hardwired codec offers standard-definition quality video capture and playback at 30fps, as well as supports two-way real-time video conferencing.
The S3C6410 processor supports all major operating systems, including Windows Mobile, Linux, and Symbian OSTM. The S3C6410 processor is expected to be available in sample quantities in May, with mass production scheduled for the third quarter of 2008.
- prev
- 1
- next
