Among European semis, MS prefers VAT over Melexis, Nordic Semiconductor
13/06/2023 09:56
** Morgan Stanley favours VAT Group VACN.S over Melexis
MLXS.BR and Nordic Semiconductor NOD.OL among European
semiconductor companies, as it sees the group offering the
"right mix" of quality and momentum
** With its vacuum expertise, the Swiss company is moving
towards becoming a quasi-monopoly in high-end vacuum parts and
components, offering a rare combination of high quality and
strong momentum, MS says
** The broker initiates VAT with an "overweight" rating,
noting that while it may not be cheap, there is potential for
around 20% upside to the price target and a plausible bull case
of +50%
** On the other hand, Belgium-based Melexis, initiated at
"equal-weight", though well positioned in the automotive sector,
may see pricing pressures, shorter lead times, as the market
transitions towards a more balanced demand-supply equation
** Morgan Stanley sees Nordic Semiconductor, also initiated
at "equal-weight", as well positioned in cellular internet of
things (IoT) — used to connect physical objects to the Internet
** However, there are some concerns about the company's
outlook and its investment in IoT not meeting expectations, says
MS
** MS sees bifurcating trends in the semiconductor equipment
industry, with strong automotive support and weak consumer IoT
applications, resulting in a divide between low memory
investment and high growth in mature nodes
(Reporting by Dina Kartit)
((dina.kartit@thomsonreuters.com))