Is the worst over for the semicap industry?
Maybank says chip shortage is becoming less severe.
Maybank sees a robust outlook for the semicap industry, saying there have been signs that the chip shortage is becoming less severe.
“We are also seeing emerging signs that the worst could be over in certain corners,” Maybank said, despite the increasing number of companies believing that the supply shortage could last into 2023.
Amongst the companies they cover, Maybank said they saw a climb in the inventory days of Texas Indsutments (TI) by four days quarter-on-quarter to 116, whilst TI is “putting more emphasis on industrial and automotive.”
Venture, Aztech, and Frencken also did not see a worsening of effects from components shortages in the fourth quarter of 2021, the analyst added.
As for UMS and AEM, Maybank said they are relatively sheltered from the impacts of shortages.
"We also see UMS as facing lower risks with components shortages because UMS owns its own materials distribution arm,” Maybank added.
Meanwhile, the analyst said fundamentals for semicon equipment also remain robust in 2022.
The only areas of vulnerability in the sector are the following: margin compression if costs are not fully passed along; and/or worsening of supply chain disruptions.
Here are Maybank's other insights on the semicap industry: "In the current reporting season, we believe TSMC’s FY22E capex budget of USD40-44b (+40% YoY at midpoint), Lam Research’s 2022 WFE estimate of USD100b (2021: USD85-90b), and Advantest’s optimism of SoC test equipment market are updates to affirm this view. Barring unforeseen supply chain disruptions, we continue to see room for AEM and UMS to provide positive earnings surprises in 4Q21-FY22."