Despite the recent sell-off, the Philadelphia Semiconductor Index has risen 92% for 16 years, surpassing all 11 S & P peers for the second year in a row (mainly due to earnings growth and unprecedented consolidation by companies), although analysts There are no bearish semiconductor stocks, but they also suggest investors need to be more selective about these stocks and be alert to signs of slowing demand and rising inventories. Here's what analysts think about the 2018 semiconductor trend.
Morgan Stanley
However, the more than expected growth in the semiconductor industry in 2017 has drawn less attention to inventories, supply chain growth and dual ordering. The market itself is so complex that it can not ignore problems because of growth. Nevertheless, there are still some opportunities for 18 years.
The strong semiconductor market has brought signs of an expansion in customer numbers, a trend that does not normally have a negative impact on stocks until the reversal, at least not because of strong demand.
Nonetheless, investors should consider a combination of factors, including low-growth expectations, the less-volatile memory market or capital expenditures, and make choices in a complex environment.
According to the current situation, Morgan Stanley recommended holding stocks on the sidelines, the recommended stocks include Asma, Xilinx, Ambas, Adolphe Semiconductor, Tyco Electronics, Micron Technology, Applied Materials and Ram Research.
Oppenheimer
It is now in the middle and late stages of the rising semiconductor industry that started in 2016.
The strong growth in semiconductor stocks over the past 18 months has caused investors to be more sensitive now to the problems of weak demand or over-stocking.
Stock picks are 'pivotal' at this stage, and Oppenheimer recommends companies that provide long-term above-average growth, free cash flow and shareholder returns. The companies most recommended for growth are Core Source Systems, Best News and S & T Electronics, Broadcom Ltd, Adorno, Texas Instruments and Millwell Technology.
Bloomberg smart
Revenue from chip makers in 2017, mainly from earnings growth and favorable conditions for mergers and acquisitions, is unlikely to re-appear in 2018. The semiconductor industry still has potential for acquisitions and earnings growth, but growth will slow.
Automotive and industrial chips may still be able to maintain high growth, while the memory market depends on the needs of the mobile phone industry.
U.S. tax reform and new cash repatriation policies may contribute to earnings growth.
Sidi investment bank
Continue to be optimistic about the 2018 semiconductor equipment company's development, and that the recent stock price drop is a buying opportunity.
Samsung, Toshiba and Intel are shipping, delivering and installing 3D NAND in the first half of 2018 as planned, laying the groundwork for shipments in the next quarter. Despite concern over memory prices, the survey shows the factory still has not released At the same time, suppliers think demand will continue to outstrip supply by 2018, even as capacity increases.
Industry recommended materials and MKS Instrument; Ram Research and FormFactor Inc. will be followed in 2018 with outstanding performance.