Monday, June 24, 2024

Analog Devices, Infineon, Renesas preferred analog chip names: UBS

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Analog Devices headquarters in Silicon Valley

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Analog Devices (NASDAQ:ADI), Infineon Technologies (OTCQX:IFNNY) (OTCQX:IFNNF) and Renesas Electronics (OTCPK:RNECY) are UBS’s preferred stocks in the analog portion of the semiconductor industry, as the investment firm said it is starting to see some stabilization in the microcontroller space.

A team of analysts, led by Francois-Xavier Bouvignies, said that while inventories continued to increase, pricing stabilization started, as the average pricing rose 3% in August and was flat in September, compared to down 4% two months ago.

The increase was driven by strength in amplifiers, capacitors and diodes. Additionally, microcontrollers, or MCUs, saw a price drop of around 1%, though that’s down significantly from the 10% drop just three months ago.

Additionally, Metal-Oxide-Semiconductor Field-Effect Transistor, or MOSFETs, and Insulated-Gate Bipolar Transistor, or IGBTs, were down “marginally” at 1%.

“Although this stabilizing pricing is supportive of the view of a less harsh pricing environment during this downturn, we believe it is still too early to be indicative of a wider trend,” the analysts wrote.

“Pricing seems to have continued to stabilize with another month of relatively flat pricing, and we continue to believe in a return to a normal pricing environment of low-single-digit % declines of pricing on an annual basis,” the analysts added, while pointing out their preference for companies with automotive exposure.

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