07.04.2001
Semiconductor sales still dropping

• Development: The Semiconductor Industry Association reported that the three month moving average of global semiconductor sales dropped 20% in May from one year ago and 7.3% down from April.

• Analysis: The slowing global economy led by the US and a spike in demand during the last up-tick in the cycle are primarily to blame. A steadier flow of US economic data confirming a bottoming of GDP growth should push semi shares higher.

• Primasia View: We have already sharply reduced estimates for TSMC and UMC, however, the shares are trading at historical lows. A turnaround is inevitable.

LindaLiu@Primasia.com +886-[0]2-2547-8867