Keybanc sees signs of life in China for semiconductor sector

Monolithic Power Systems

08/04/2024 12:59

** Keybanc sees signs of life in China for the semiconductor
equipment sector, but says there's still uncertainty if this is
sustainable in the near-term
    ** Keybanc was surprised to hear commentary from
distribution in China that demand appears to be picking up, as
the broker thinks it's unclear whether this is true end-demand
or simply restocking, highlighting resales in the country's
market appear to be tracking better than rest of world (ROW)
    ** "It’s unclear if this also reflects end-demand improving
as China automotive commentary has been strong, while global
tier-1 demand in China also appears to be improving but channel
partners indicate increased demand ROW appears to be more
restocking driven," it says
    ** Adds channel partners are cautiously optimistic about
improving demand trends, as inventories have clearly started to
normalize    
    ** "Weaker iPhone 15 demand in China being largely offset by
India and higher demand for legacy models," it says, flagging
Android high-end is strong, while mid-to-low is weak
    ** Keybanc says it has most positive findings for Nvidia
 NVDA.O , Micron  MU.O , Qualcomm  QCOM.O  and Monolithic Power
Systems  MPWR.O , as well as positive remarks for ARM Holdings
 O9Ty.F , Analog Devices  ADI.O ,  Microchip Technology  MCHP.O 
and Texas Instruments  TXN.O  
    ** Broker downgrades Skyworks Solutions  SWKS.O  to "sector
weight" from "overweight", as its ability to drive content
growth is becoming more challenging; shares, which are down 6.1%
YTD, fall 2.1% as of 1140 GMT

 (Reporting by Ozan Ergenay)
 ((ozan.ergenay@thomsonreuters.com))