Memory drove February semiconductor data, but non-memory ICs remain below trend
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Memory drove February semiconductor data, but non-memory ICs remain below trend
SIA data show that February’s headline semiconductor strength came mainly from DRAM and NAND; non-memory IC shipments declined month-over-month and remain below seasonal levels, while Goldman Sachs is constructive on analog semiconductor companies with lower-than-trend shipments but strong supply-chain management.
- February IC shipments (excluding memory) fell 10% month-on-month, weaker than typical seasonality.
- The three-month moving average for non-memory IC shipments is about 8% below the long-term demand trend, versus 6% below trend in January.
- DRAM revenue rose 86% month-over-month, while NAND revenue rose 54% month-over-month, both well above historical seasonality.
- Goldman Sachs expects shipments to gradually approach trend levels over the next few quarters and anticipates more constructive company commentary on demand normalization and subsequent restocking.
- On the stock level, Goldman Sachs is especially constructive on analog-related names such as Microchip, Analog Devices, and NXP.
Report interpretation
Overview
This report uses February data from the Semiconductor Industry Association (SIA) to assess shipment, revenue, and price trends in the Americas technology semiconductor industry. It finds that the overall semiconductor data above seasonal levels in February were driven mainly by memory, especially DRAM and NAND; after excluding memory, IC shipments remain weaker than typical seasonality, indicating that non-memory recovery is still relatively modest.
Core views
The core view is that improved total semiconductor levels should not be interpreted as a broad recovery because memory is materially boosting total revenue and ASP, while non-memory ICs, analog, MCU, and other segments remain below long-term trend. However, Goldman Sachs sees the improvement trend in recent months as consistent with semiconductor companies’ comments that shipments are getting closer to end demand, and expects shipments to converge toward trend levels over the next few quarters, potentially accompanied by signals of demand normalization and inventory replenishment. On stock implications, Goldman Sachs favors analog-related companies with below-trend shipments and relatively good supply-chain management, with particular emphasis on Microchip, Analog Devices, and NXP.
Analysis framework
The report uses monthly SIA data, comparing February revenue, shipment, and ASP month-over-month changes with historical February seasonality levels, and uses a three-month moving average to measure each semiconductor sub-industry’s deviation from the long-term demand trend. The analysis explicitly separates memory and non-memory ICs to prevent strong DRAM and NAND performance from masking lagging trends in other IC sub-segments.
Methodology notes
Monthly data versus historical seasonality comparison
By comparing month-over-month changes in February revenue, shipments, and ASP against the historical February median, determine whether monthly performance is above or below typical seasonality.
Deviation from long-term trend using three-month moving average
The three-month moving-average shipment level is compared with the long-term trend line to gauge current demand strength by industry or sub-industry, for example non-memory ICs being about 8% below trend.
Mapping industry data to stock preferences
The report combines the degree of shipment deviation from trend with supply-chain management quality to select companies that could benefit from demand normalization and restocking.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- DRAMMajor positive driver highlighted in the report
- Strengths
- February revenue rose 86% month-on-month and ASP rose 42% month-on-month, with a significant year-over-year price increase.
- Weaknesses
- Strong performance could distort the overall semiconductor picture and lead the market to overestimate recovery strength in non-memory segments.
- Comparison
- Performance is clearly stronger than non-memory IC, analog, MPU, MCU, DSP, and Logic sub-segments.
- Risks
- If memory pricing or demand momentum weakens, semiconductor-wide data could lose its main source of support.
- NANDMajor positive driver highlighted in the report
- Strengths
- February revenue rose 54% month-on-month and ASP rose 33% month-on-month, both above typical seasonality.
- Weaknesses
- Like DRAM, strength is concentrated in memory and may not represent synchronized recovery across all IC segments.
- Comparison
- It clearly outperformed non-memory IC shipment performance.
- Risks
- Price-driven improvement may be vulnerable to supply-demand and inventory cycle volatility.
- ICs ex. MemoryKey indicator for gauging real demand in non-memory semiconductors
- Strengths
- Trend improved over recent months and is consistent with company commentary that shipments are moving closer to end-market demand.
- Weaknesses
- February shipments declined 10% month-on-month and the three-month moving average is about 8% below long-term trend.
- Comparison
- Significantly weaker than DRAM and NAND, showing a diverging recovery within the industry.
- Risks
- If end-demand recovery is slower than expected, convergence to trend for shipments may be delayed.
- AnalogStock-relevant segment favored by Goldman Sachs
- Strengths
- Shipments remain below trend; if demand normalization and restocking appear, there is meaningful recovery potential.
- Weaknesses
- February analog shipments were still 6.5% below trend, weaker than 4.6% below trend in January.
- Comparison
- Recovery is slower than memory currently; the shortfall versus trend is smaller than for MCU.
- Risks
- Weak recovery in end-markets such as industrial, automotive, or communications could weigh on the analog chain.
- Microchip Technology Inc.Bullish name cited by Goldman Sachs
- Strengths
- The report states it is one of Goldman’s favored analog-related names and highlights its below-trend shipments and supply-chain management.
- Weaknesses
- The report does not provide company-level financial forecasts or target price details in the narrative.
- Comparison
- Listed alongside Analog Devices and NXP as Goldman-favored names.
- Risks
- If recovery in analog and MCU shipments is slower than expected, valuation catalysts may be delayed.
- Analog Devices Inc.Bullish name cited by Goldman Sachs
- Strengths
- Disclosed as Buy in the report and included among Goldman’s favored analog-related names.
- Weaknesses
- The report is primarily an industry-data commentary and does not include a company-level earnings breakdown.
- Comparison
- Grouped with Microchip and NXP as preferred names with relatively good supply-chain management that could benefit from normalization.
- Risks
- If end-demand normalization falls short of expectations, valuation and earnings forecasts may come under pressure.
- NXP Semiconductors NVBullish name cited by Goldman Sachs
- Strengths
- Disclosed as Buy in the report and included among Goldman’s favored analog-related names.
- Weaknesses
- The main text does not provide new company-level rating changes or target price revisions.
- Comparison
- Listed together with Microchip and Analog Devices as a key bullish stock implication.
- Risks
- If demand recovery in automotive and industrial chains is weak, the pace of normalization could be impacted.
Key data
- IC ex. Memory shipmentsFebruary down 10% month-on-monthWeaker than typical seasonality; the three-month moving average is about 8% below long-term demand trend, and 6% below trend in January.
- IC ex. Memory relative trend8% below trendJanuary was 6.1% below trend.
- Analog relative trend6.5% below trendJanuary was 4.6% below trend.
- MCU relative trend27.5% below trendJanuary was 26.6% below trend, still a clearly below-trend sub-segment.
- DRAM revenueup 86% month-on-monthAbove typical monthly seasonality.
- NAND revenueup 54% month-on-monthAbove typical monthly seasonality.
- Total semiconductor revenueup 25% month-on-month, up 86% year-on-yearApparent strength is largely driven by memory revenue growth and ASP increases.
- DRAM ASPup 42% month-on-month, up 241% year-on-yearPrice contribution is significant.
- NAND ASPup 33% month-on-month, up 192% year-on-yearPrice contribution is significant.
Impact & implications
The investment implication is that memory strength makes overall semiconductor figures appear above seasonal levels, while non-memory ICs still indicate a uneven demand recovery. If shipments continue to converge toward trend over the next few quarters and signs of demand normalization and restocking emerge, analog and MCU-related companies that are still below trend could have meaningful recovery upside.
Risks
- Memory’s contribution to aggregate data may be too large and could obscure the real weakness in non-memory ICs.
- Non-memory IC shipments are still below long-term trend, and demand normalization may be slower than expected.
- If restocking does not materialize, recovery leverage in segments like analog and MCU may not be delivered.
- If semiconductor ASP improvement is mainly memory-driven, a subsequent price-cycle rollover could pressure revenue growth.
- The report is primarily an industry monthly commentary; some company-level information comes from disclosure pages and does not include complete company-level earnings forecast updates.
What to watch
- Whether IC ex. Memory three-month moving averages continue to revert toward long-term trend over the coming months.
- Whether the gap between actual and trend for analog and MCU shipments narrows.
- Whether semiconductor executives provide clearer commentary on demand normalization and restocking.
- Whether ASP and revenue momentum in DRAM and NAND remains sustainable.
- Order, inventory, and supply-chain management signals from Microchip, Analog Devices, and NXP.