Chip makers predict second half bounce: Page 2 of 2

April 28, 2020 //By Nick Flaherty
Covid-19 bounce
The first quarter results from chip makers are showing a dip as a result of the Covid-19 lockdowns around the world but are confident demand will be back in the second half of the year.

“With the benefit of hindsight, our customers overcorrected to the downside and we then spent a year-and-a-half chasing back up to support demand. With this in mind, we are not trying to predict this economic recession and recovery. We will be running our factories at about the level they ran in the first quarter of 2020. This will likely result in an increase in inventory during the second quarter but this will be important to support our customers during a time when they have limited ability to forecast.”

The automotive semiconductor market will remain slow.

“The first quarter ran as expected into Chinese New Year, but was slow coming out of the holiday as Chinese factories struggled to come back due to COVID-19. In early March, we saw a pickup in orders from most markets as supply chain disruptions led to increased customer concerns about being able to secure supply,” said Dave Pahl, head of investor relations at TI.

“This increase in demand that we experienced in March had continued into early April with the exception of automotive as manufacturers' plant closures reduced consumption. This increase in orders has steadily abated in April but returned to levels we saw in early March.”

For imaging chips, Teledyne “expects to achieve positive, albeit low-single-digit segment full year sales growth,” said Robert Mehrabian, executive chairman. The company’s 70 plants including Grenoble in France were all operational. It works closely with NXP on systems for avionics and space.

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