SALES of global semiconductor marked a new monthly high for September – the highest thus far this year – by accelerating a further 4.5% month-on-month (mom) and 5.8% year-on-year (yoy) to US$37.9 bil, according to the Semiconductor Industry Association (SIA).
On a quarterly basis, numbers were also at the highest since 4Q 2018 with 3Q 2020’s figures rising 11.0% quarter-on-quarter (qoq) and 5.8% yoy to US$113.6 bil.
TA Securities Research analyst Wilson Loo expects the semiconductor sector to continue displaying resilience to the dim global economic backdrop amid COVID-19 headwinds throughout the year given sales in 9M 2020 rose 5.5% to US$320.5 bil.
“While uncertainly lingers due to the prolonged pandemic, global semiconductor sales is on track to resume growth this year (2019: -12.0%) with the World Semiconductor Trade Statistics Organisation forecasting growth of 3.3% in 2020 and thereafter, accelerating 6.2% in 2021,” he wrote in a sector update.
All-in, TA Securities Research maintained both its “neutral” stance on the semiconductor sector and “buy” rating on Unisem (M) Bhd with a target price of RM6.88.
“We continue to like (Unisem) for its robust earnings growth profile underpinned by its advanced packaging technologies, healthy pipeline, expansion plans, and healthy balance sheet,” justified Loo.
Elsewhere, the research house placed as “under review” its recommendation on Elsoft Research Bhd (target price 70 sen) and Malaysian Pacific Industries Bhd (target price RM20.90) pending their upcoming results.
“The key risks for the sector currently include: (i) a prolonged COVID-19 pandemic weighing on economic growth and sentiment, (ii) a prolonged and heightened trade war; and (iii) fluctuations in the dollar vs ringgit exchange rate,” added Loo. – Nov 2, 2020
