Micro Logic October Results on Track

The SIA/WSTS October 2006 sales and shipment data for Micro Logic were released this week. The results are very much in line with Semico’s projections.

October sales were $3.84 billion. This is down 37.2% sequentially, but up 10.4% year over year. The MPU market accounts for more than half the sales of ML. This is driven by the PC market cycle. The October sales follow the PC market trends. The first month of the quarter is the lowest, with almost half the sales for the quarter occurring in the last month.

The MPU ASPs have been exceptionally volatile in 2006. The MPU ASPs did drop in October, though it was not as steep seen previously in the year. It appears that MPU pricing is starting to firm up. During 2006 Intel was ramping up its new products manufactured on 65nm faster than expected. Thus, the prices for previous generation MPUs dropped quickly to clear out this inventory. AMD followed suit. This is starting to settle out. Also, helping to decelerate the MPU ASP decline in 4Q 2006 is the product mix. Notebook PCs are selling at a higher rate than desktop PCs. The mobile MPUs carry a higher price.

Semico projects that ML will finish out the year at $54.7 billion, essentially flat growth. The main reason was the severe MPU price drops in mid-2006. Unit shipments for all ML categories (MPU, MCU, and DSP) remain strong. This indicates that Semico’s forecast for PCs and cell phones are on track.