Semiconductor Margins Bouncing Back, But What About Revenues?

As the recovery from the economic meltdown in late 2008 takes shape, analysts and market pundits have bandied the usual list of alphabets -- V-shaped recovery, U-Shaped recovery, L-shaped and so on. And some don't see any recovery at all.

I put together some charts which show how margins and revenues have moved over the last six quarters for some of the leading semiconductor stocks. I chose semis mainly because they are perceived to be leading indicators of a recovery. Take a look at the charts and decide the shape yourself.

(All charts are from Gridstone Research data. Click to enlarge)

Intel (INTC)

Margins and revenues seem to have staged a V-shaped recovery with revenues lagging slightly.

Advanced Micro Devices (AMD)

Margins have staged a V-shaped recovery but revenue still lags

Nvidia (NVDA)

Margins and revenues have staged a V. Looks like business as usual from the Oct09 quarter for Nvidia.

Applied Materials (AMAT)

Margins are a V but revenue lags well behind...Capex spending is still subdued and equipment makers are naturally affected the most.

ASML N.V (ASML)

One look at ASML and we understand how another one or two quarters of sequential revenue decline could have landed them in bankruptcy zone!

KLA-Tencor Corp (KLAC)

Equipment makers are a relieved lot but there is still a steep climb as far as top line recovery is concerned.

Broadcom (BRCM)

You don't trip too hard if you don't own fabs. Broadcom vindicates the 'fabless' model for semi chip makers.

Taiwan Semiconductor (TSM)
However, owning fabs is no excuse for making losses. TSM has been a standout among the semi stocks during this downturn. For TSM, recovery is complete and its time to look for growth.

ST Microelectronics (STM)

A more diversified chip play is also a cushion against such deep bouts of recession. ST Micro was affected in the automotive and consumer segment but telecom equipment and PC chips helped it recover faster.

Linear Technology (LLTC)

Another semi stock which had positive margins through the last six quarters. Margins however seem to stage a gradual recovery only.

ON Semiconductor (ONNN)

Another diversified semi stock which has withstood the recession better. A quick V for LLTC.

SanDisk (SNDK)

For memory makers, 2008 was by itself bad. So they look better on a year-over-year comparison in 2009. But its a recovery nevertheless.

In summary, it looks like margins are back with a V but revenues are still not giving a clear picture. Probably the Dec. '09 quarter can give more clarity on how revenue shapes up.

Disclosure: No Positions