UMS Holdings

[NTL]

Investors are pushing the price up to $0.58 now. Probably they are positive of this industry too.

[Boon]

IDC Finds Worldwide Smartphone Shipments on Pace to Grow Nearly 40% in 2013 While Average Selling Prices Decline More Than 12%

26 Nov 2013

FRAMINGHAM, Mass. November 26, 2013 – According to a recently published mobile phone forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, worldwide smartphone shipments are expected to surpass 1.0 billion units in 2013, representing 39.3% growth over 2012. Despite a number of mature markets nearing smartphone saturation, the demand for low-cost computing in emerging markets continues to drive the smartphone market forward. By 2017, total smartphone shipments are expected to approach 1.7 billion units, resulting in a compound annual growth rate (CAGR) of 18.4% from 2013 to 2017.

A number of trends co-exist in the global smartphone market, but none have more of an affect on driving market growth than the steady decline in average selling prices (ASPs). Android has enabled a number of new manufacturers to enter the smartphone market supported by a variety of turnkey processing solutions. Many of these handset vendors have focused on low-cost devices as a way to build brand awareness. In 2013, IDC expects smartphone ASPs to be $337, down -12.8% from $387 in 2012. This trend will continue in the years to come and IDC expects smartphone ASPs to gradually drop to $265 by 2017.

"The game has changed quite drastically due to the decline in smartphone ASPs," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker. "Just a few years back the industry was talking about the next billion people to connect, and it was assumed the majority of these people would do so by way of the feature phone. Given the trajectory of ASPs, smartphones are now a very realistic option to connect those billion users."

"The key driver behind smartphone volumes in the years ahead is the expected decrease in prices," said Ramon Llamas, Research Manager with IDC's Mobile Phone team. "Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass market users. Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience."

From a volume perspective, emerging markets including Asia/Pacific, Latin America, and Middle East and Africa (MEA) will all post market-beating growth rates from 2013 to 2017. Asia/Pacific will also experience some market share growth from 2013 to 2017. Developed markets, by contrast, will see market share erosion, but will nonetheless see volume increases during the same time period. All combined, the worldwide smartphone market is poised for certain growth.............................................................................

http://www.idc.com/getdoc.jsp?containerId=prUS24461213

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Digitimes Research: Global smartphone shipments to reach 1.24 billion in 2014
Luke Lin, DIGITIMES Research, Taipei [Monday 25 November 2013]

Global smartphone shipments are expected to reach about 1.24 billion in 2014, up 30% on year, according to Digitimes Research.

The increase in growth is expected to be driven by demand in Russia, India, Indonesia and Latin America countries.

Digitimes Research believes that Samsung Electronics will lead the way in shipments followed by Apple, LG Electronics, Sony, Lenovo, Huawei Device, Microsoft, ZTE, Coolpad and TCL.

Android and IOS operating systems are expected to be used in about 93% of the devices shipped in 2014, added Digitimes Research.

http://www.digitimes.com/news/a20131125PD218.html

(vested)

[Boon]

2013 Semiconductor Equipment Sales Forecast $32 Billion; Strong Growth Forecast for 2014

TOKYO, Japan — December 3, 2013 — SEMI projects that worldwide sales of new semiconductor manufacturing equipment will contract 13.3 percent to $32.0 billion in 2013, according to the SEMI Year-end Forecast, released here today at the annual SEMIcon Japan exposition. In 2014, all regions except Rest of World are expected to have strong positive growth, resulting in a global increase of 23.2 percent in sales. 2015 sales are expected to continue to grow — increasing 2.4 percent with Japan, Europe, Korea, China, and Rest of World regions registering positive growth.........................................

http://www.semi.org/en/en/node/48216

(vested)

[Boon]

RESEARCH BULLETIN, DECEMBER 3, 2013, by IC INSIGHTS

Cellphones Pass PCs as Biggest Systems Market and IC User
Tablets and wireless networks are expected to show highest growth rates through 2017.

Total worldwide production value of electronic systems is projected to increase 4% in 2013 to $1.41 trillion and climb to about $1.74 trillion in 2017, which represents a compound annual growth rate (CAGR) of 5.0% from $1.36 billion in 2012, according to IC Insights’ new 2014 edition of IC Market Drivers—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits. The 475-page report shows cellphones overtaking standard personal computers (desktop and notebook PCs) as both the largest electronic systems market and the largest end-use application for ICs in 2013 for the first time ever......................................................

http://www.icinsights.com/data/articles/...ts/618.pdf

[Boon]

Applied Materials Inc (AMAT) was at Credit Suisse Technology Conference held on December 3, 2013 2:00 AM ET, and during the Q&A session, the statement by Bob Halliday - "put a lot of the manufacturing and intellectual property value added through Singapore, which we have already sampled out of that." means it is in their game plan to shift more manufacturing job to Singapore, I reckon.
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Question: John Pitzer – Credit Suisse

Well, Bob, when you think about the Tokyo Electron transaction the cake is truly the fundamental synergies on the product side. I would argue the icing is some of the financial advantages you will get.

Can you walk a little bit through those advantages and, just in general, your view of cash flow and uses of cash and return of cash to shareholders?

Answer : Bob Halliday (AMAT)

Yes, there's a couple of leverage points there. One is generating more income and the second one, which is really fundamental, is generating better cash flow for investors. I think we have a real opportunity for both.

Because the combined companies in the strong wafer fab equipment yield like 37, we said we could do 18 billion. But even in a lesser year, we think we can do significantly better operating margins and that is really my focus for Applied and the combined companies to generate significantly improved operating margins even regardless of the volume. Okay, the wafer fab equipment volume.

So if you can generate 20%, 25% operating margins – and that is very viable even in a low year. Because you look at 50% drop through pretty strong IPs, strong product positions, good service business, we model 25% operating margin. I think that is very doable even in an off year. I don't know why we can't get to 20% or so. So then, what gets to investors? Cash, right?

So if you look at the semi cap industry it is an industry that inherently can generate significant cash returns as long as you don't get too much fixed cost. Because the industry tends to cycle up and down.

So if you look at the history of the industry, you have one boom year, one year you are ascending, its chaos growing, one year you make a lot of money and one year you write off everything. And that is a fundamental issue of putting too much fixed cost into the structures, too much time, it takes too long.

So, if you take these costs and time out you can make 20%, 25% operating margins pretty much year in and year out. And it is cash margins if you do it right. Because we don't have to invest a lot in fixed assets. Its receivables and inventory we cycle up and down and so the cash-operating margin can be 20%, 25%.

And what this merger unleashed for us was almost a unique opportunity structurally to merge the companies. One of the Japanese operating companies was an American operating company and put the parent company structure in Holland and also put a lot of the manufacturing and intellectual property value added through Singapore, which we have already sampled out of that.

So what you get is a much greater flexibility of moving cash around the Company, and returning dividends and higher share buybacks to investors. So, I think it is almost uniquely positioned as a company that can generate high cash returns to investors. And if we are successful in growing the Company, it's a big tech, potentially strong growth. Very high cash-generating business.

http://seekingalpha.com/article/1875061-...art=single

(Vested)

[Drizzt]

boon, does this refer more to Tokyo Electron having a manufacturing base in Singapore or that its inferring they see an opportunity to streamline into Tokyo Electron's subsidiary

[Boon]

boon, does this refer more to Tokyo Electron having a manufacturing base in Singapore or that its inferring they see an opportunity to streamline into Tokyo Electron's subsidiary

Drizzt,

Current status:
- AMAT’s global manufacturing hub is in Singapore.
- AMAT is enjoying the “all in cost saving including tax benefits” by operating in Singapore.
- Tel’s manufacturing is all done in Japan – Tel has no manufacturing facilities outside of Japan
- Tel is not enjoying the “all in cost saving including tax benefits” as AMAT does

Merged Entity (AMAT + TEL)
- To continue reaping the “all in cost saving including tax benefits” for the merged entity, it would make sense to shift manufacturing base from Japan to Singapore. Since, AMAT has been well established with Singapore as its global manufacturing hub, it would most probably be the case of TEL “streamlining into” AMAT’s operation - it looks like AMAT is leading TEL down this path.
- It doesn’t make sense to expect TEL to establish a new manufacturing base in Singapore and expect AMAT ‘s operation to be subsumed under it - too costly IMO.

(vested)

[Drizzt]

ah thanks. it sounds like volume or opportunities abound.

[Boon]

Global Semiconductor Sales Increase in October; Industry on Track for Highest-Ever Annual Sales in 2013

Worldwide sales increase for eighth straight month and top $27 billion for first time ever in October; WSTS forecast projects growth of 4.4 percent in 2013 and 4.1 percent in 2014

Published Wednesday, December 4, 2013 4:00 pm
by Dan Rosso

WASHINGTON—Dec. 4, 2013—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that worldwide sales of semiconductors reached $27.06 billion for the month of October 2013, a 7.2 percent increase from the same month last year when sales were $25.24 billion, and 0.8 percent higher than last month’s total. October marked the eighth consecutive month of increasing sales and the industry’s first-ever month above $27 billion in sales. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. Additionally, a new WSTS industry forecast projects that the industry will reach its highest-ever annual sales total in 2013, and continued growth is projected for 2014 and 2015.

“With eight straight months of growth and a new monthly sales record in October, the global semiconductor industry is on track to exceed $300 billion in .......................................................................

http://www.semiconductors.org/news/2013/...s_in_2013/

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[mulyc]

this is one stock to hold for the long term.

vested.