Chipmakers exposed to personal computers, consumer electronics and Android smartphones have noted weakening demand in their second-quarter earnings reports. Meanwhile, other semiconductor stocks have posted beat-and-raise reports on the strength of enterprise computing, industrial and automotive chip demand.
In the past week, Advanced Micro Devices, Power Integrations, Qorvo, SiTime, Skyworks Solutions and Synaptics lowered their revenue outlooks for the third and fourth quarters based on softening consumer device sales.
And last week, Intel and Qualcomm cut their guidance for the same reason.
Slowing sales of personal computers and Android smartphones were well understood heading into the second-quarter earnings season. However, continued strong sales of Apple iPhones helped to offset the slowdown for chipmakers such as Skyworks and Cirrus Logic.
Qorvo Hit By Weak Chinese Smartphone Sales
Wireless-chip maker Qorvo has been hurt by declining sales of Chinese Android smartphones, including those from Oppo, Vivo and Xiaomi.
Qorvo faces a "massive headwind" as Chinese smartphone makers work down large inventories of components, Needham semiconductor stocks analyst Rajvindra Gill said in a note to clients.
"They now expect December to be the bottom for the Android market following aggressive inventory burns," Gill said. The weakness is in low and midrange Android handsets, not premium devices, he said.
Some Semiconductor Stocks Doing Well
Chipmakers with greater exposure to cloud computing, industrial and automotive chip markets have outperformed this earnings season. Semiconductor stocks in that camp include Lattice Semiconductor, Microchip Technology, Monolithic Power Systems and Rambus. Those companies have delivered beat-and-raise quarterly reports this earnings season.
Semiconductor stocks overall have perked up lately. IBD's semiconductor manufacturing group currently ranks No. 76 out of 197 industry groups that IBD tracks. Six weeks ago, it ranked No. 134.
IBD's fabless semiconductor industry group ranks No. 94, up from No. 166 six weeks ago.
Meanwhile, the Philadelphia semiconductor index, known as SOX, is down 22.6% year to date, vs. a drop of 13% for the S&P 500. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
