Goldman Sachs Sees Strong Semiconductor Shipments in August

Goldman Sachs has reported that semiconductor shipments in August surpassed typical seasonal trends, according to data from the Semiconductor Industry Association. The firm noted that shipments of integrated circuits, excluding memory, rose approximately 2% month over month, exceeding normal seasonal patterns. While most segments shipped above seasonal levels, discrete, microcontrollers, and digital signal processors saw worse-than-seasonal declines.

Overall, shipments are now tracking 10% above long-term demand on a three-month moving average basis, up from 7% above trend in July. Analog shipments are also running approximately 10% above trend. Goldman Sachs attributes the limited areas of weakness to broad consumer electronics softness. The firm expects shipments to remain above trend in the medium term, given the duration of below-trend shipments over the past four years.

Goldman Sachs continues to favor Microchip, NXP, and Analog Devices, focusing on companies that shipped furthest below trend during the downturn. Microchip has gained 25% 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 recent 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 of $0.70 per share and $1.46 billion in revenue. 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.