Goldman Sachs Reports Semiconductor Shipments Surpass Seasonal Trends in August
Goldman Sachs has reported that semiconductor shipments in August outpaced typical seasonal trends, according to data from the Semiconductor Industry Association. Shipments of integrated circuits, excluding memory, rose about 2% month-over-month, surpassing normal seasonal patterns. While most segments performed above expectations, discrete, microcontrollers, and digital signal processors experienced worse-than-seasonal declines.
The overall shipments are now tracking 10% above long-term demand on a three-month moving average, up from 7% above trend in July. Analog shipments are also running approximately 10% above trend. Goldman Sachs attributes the limited weakness to softness in the broader consumer electronics market. The firm anticipates that shipments will remain above trend in the medium term due to the prolonged period of below-trend shipments over the past four years.
Goldman Sachs continues to favor Microchip, NXP, and Analog Devices, focusing on companies that shipped the furthest below trend during the downturn. Microchip has seen a 25% gain over the past six months, with 16 analysts recently revising earnings upwards. The stock currently trades above its Fair Value estimate, according to InvestingPro analysis.
In other news, Microchip Technology reported fiscal first-quarter results that surpassed Wall Street expectations. The company achieved adjusted earnings of $0.76 per share on revenue of $1.48 billion, exceeding forecasts. Microchip also provided guidance for the upcoming quarter, indicating anticipated growth in sales, margins, and profit. Shareholders approved an amendment to the company’s 2004 Equity Incentive Plan, authorizing an additional 12 million shares of common stock for issuance. Analysts from Cantor Fitzgerald and UBS provided mixed but generally positive outlooks, with Cantor Fitzgerald reiterating an Overweight rating and UBS adjusting its price target to $120 from $130 while maintaining a Buy rating.