March chip sales above seasonality – Citi

According to a recent note from Citi, semiconductor sales surged in March above seasonal expectations and analysts’ forecasts.

A report from the SIA revealed that US semiconductor sales in March reached $50.8 billion, marking a notable 16.4% month-over-month increase. This figure surpassed Citi’s estimate of $50.1 billion and defied seasonal norms by rising 12.0% month-over-month.

The unexpected boost in sales was attributed to robust performance across all product categories, particularly in analog and microcontrollers. Analog and microcontroller units experienced a staggering 50% month-over-month increase, well surpassing the anticipated 20% rise dictated by seasonal patterns.

Citi’s analysis suggests that this data, coupled with recent insights from analog companies, supports the prospect of an analog inventory replenishment in the latter half of 2024. Consequently, the analysts maintain a bullish outlook on the semiconductor sector.

Despite the broader positive outlook, Citi continues to uphold its 2024 semiconductor sales forecast of an 11% year-over-year increase. Micron Technology (NASDAQ:) remains their top pick, with other Buy-rated names including AMD (NASDAQ:), Broadcom (NASDAQ:), Analog Devices (NASDAQ:), Microchip Technology (NASDAQ:), and onsemi (ON).