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Date: 24-10-14

Microchip's comment linked semiconductor industry correction bubble bursts

Two weeks back, Microchip's CEO Steve Sanghi alerted that a semiconductor industry correction has begun. By reading too much into that news, many stock investors in US thought semiconductor industry is heading downwards, which resulted in the fall of stock prices of leading semiconductor companies in US. We had reported saying better not compare the whole semiconductor industry with one company's view or performance. After seeing the third Quarter 2014 revenue reports of some of the leading semiconductor companies, it's not wise to believe that semiconductor industry correction has begun. The semiconductor market is still growing.

The broad-product based (analog and mixed signal, digital signal processing, and microcontroller ) semiconductor device vendor, Texas instrument has reported a revenue of US$ 3,501 Million in the third quarter of 2014, a growth of 6.4% compared to second quarter of 2014.

Rich Templeton, TI's chairman, president and CEO said "We delivered 8 percent year-over-year revenue growth. Analog and Embedded Processing comprised 82 percent of third-quarter revenue." Microcontroller, which is part of embedded processing biz of TI is growing good, as per TI.

To give another interesting sample, NXP semiconductors has reported a revenue of $1,515 million in third quarter of 2014, a 12 percent sequential improvement, and a 21 percent increase year-on-year.

NXP generate significant of its revenue from microcontrollers. Both NXP and Texas instruments are listed in the top 10 microcontroller vendors of the world.

World's 2nd largest MCU vendor, Freescale reported a revenue of $1.21 Billion for the quarter, compared to 1.19 Billion in the previous quarter. Specifically Microcontrollers net sales were $250 Million, compared to $246 Million in the second quarter of 2014.

If you want a sample outside MCU biz, Broadcom reported a net revenue of $2.26 Billion for the third quarter of 2014, an increase of 10.7% compared with the $2.04 Billion reported for the second quarter of 2014 and an increase of 5.3% compared with the $2.15 Billion reported for the third quarter of 2013.

In another 15 days the picture will be more clear on the positive signs in the chip industry.

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