09.27.2001
Fabless getting hit by recent events

• Development: Local fabless companies, whose customers are mainly domestic downstream manufacturers, appear to be among the first group to be hit by recent events, to be seen in September revenues to be reported in a week.

• Analysis: VIA, as we estimated, will likely see a 15% MoM decline, reversing its own historical sequential uptrend of +11% from 1996 to 2000. SiS (2363.TT) will have a flat month, with shipment ramp up of SiS735 during the month. Realtek is relatively intact and states it continues to observe a seasonal uptick in September and October.

• Primasia View: Expected to be the only growth sector in the local semiconductor industry, fabless is starting to show worrying signs and we remain concerned on likely downward adjustments to forward earnings-based price multiples.