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the_floating_ gate
"If capital spending is any gauge, then the semiconductor industry still has a ...
Himanshu_Gupta
You have a valid point p_g...if would consider the % increment in the product ...
Analyst cuts 2010 chip market growth figure
Peter Clarke
9/30/2010 10:47 AM EDT
LONDON – Market forecaster iSuppli Corp. has decided it should curb its enthusiasm for the global chip market in 2010. The firm says it sees softening demand and rising inventories and has trimmed its forecast to 32 percent.
Having predicted the market would show 31 percent growth in May the company joined with most other forecasters in raising its prediction to 35 percent in August. However, iSuppli expects the chip business to experience a soft landing in 2011 with semiconductor revenue in 2011 set to rise by 5.1 percent.
"There has been a significant slowdown in the second half in consumer demand for some electronic devices, including PCs," noted Dale Ford, senior vice president at iSuppli, in a statement. "Meanwhile, inventories have been building throughout the semiconductor supply chain. These factors will conspire to cause a small sequential decline in semiconductor revenue in the fourth quarter."
The 32 percent growth figure implies global semiconductor sales will amount to $302 billion in 2010, up from $228 billion in 2009, still a remarkably strong growth year but created partly by comparison with difficult 2009, which was impacted in its first half by the global economic crisis.
The market watch firm now expects that revenue in the fourth quarter will decline by 0.3 percent compared to the third quarter, roughly in line with typical seasonal changes and the first sequential decrease since the market collapse in the fourth quarter of 2008 and first quarter of 2009.
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Warren
9/30/2010 12:58 PM EDT
Extra credit to Peter for slipping in the cool TV show reference (Curb Your Enthusiasm); on purpose or accident it matters not. Knowing the graph would be awfully small, I would have really liked to have seen the bottom bar chart extending back through 2007 but the message is clear enough... things are cooling off but growth looks to be in our future.
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phoenixdave
9/30/2010 1:10 PM EDT
Based on the chart predictions the short slowdown due to inventory should not be as disruptive as events in the past 2 years. Seems to be more closely aligned with the normal cyclical slowdown those of us in the semiconductor market have endured for decades. Wish my home valuation chart looked that good.
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CamilleK
9/30/2010 2:46 PM EDT
Growth of 32% versus 35% is not as significant as the meaning some will associate with it. Sometimes I think we try to read too much into the importance of growth deltas to the point that it starts to affect perception and influence behavior. It is a good thing we are growing and I would talk up the health to my friends and neighbors and then I would buy some electronics. Confidence is what we need and the rest will take care of itself. I do like the charts though to give us a good indication of where we are but I would not worry yet.
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EE.Mod
9/30/2010 3:02 PM EDT
As the iSupply report indicates even considering the cut predicted in growth in this year, the semiconductor sales for 2010 is still the highest since 1998. In fact the predicted 2010 semiconductor sales is just about double of sales in 1998 (about $144 billion) which in any scale, I will call it a major milestone for the industry.
I also find the 2011 chart a very likable one but wouldn't hold my breath until US economy is clearly out of red
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Himanshu_Gupta
9/30/2010 5:11 PM EDT
32% sales growth is quite good but only as comparison to 2009. If i read the predictions for yr 2011 then the expected growth only 5%. I am sure, next year i will read articles comparing growth in 2010 and in 2011 and some will see it as danger sign. I do not know if 5% growth in 2011 is healthy.
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p_g
9/30/2010 10:29 PM EDT
5% in 2011 is definitely not a good sign. I am more worried not that semiconductor cost is going up every node putting more pressure on companies. The growth is now defined by any new field which will create new customers. IPad certainly created new base.
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Himanshu_Gupta
10/1/2010 2:35 PM EDT
You have a valid point p_g...if would consider the % increment in the product sold in an electronic product category to find out the growth and not how much money did the product sale generate. With the increase in the product price, this might happen that the total income is more but the number of product actually sold are the same or lower.
New products may increase the demand but this might have an impact on the existing product. As there was news about lower sale of notebooks due to iPad.
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Baolt
9/30/2010 5:27 PM EDT
Where IC capacity utilization hits highest since Q3 2000, as 95.6%, why being so skeptical about growth rate? With the several fab-cuts global IC capacity decreased for sure, and shortly market will face shortage however there is no doubt we have huge growth up to now. There are several locomotives of the electronic market running fast, look at pads, smartphones, 3D&Led screening sets, low cost computing gadgets, many other imminent reveals announced i would say we should stop being pessimistic, and forget about bad lessons of recession times. We still have forecasts of from Mike Cowan, Future Horizons and SC Intelligence on had where its indicated above 35%, i would say with all factors on had SC market would beat 34% easily, perhaps even more if electronic supply& marketing strategies wont collapse.
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Cowan LRA Model
9/30/2010 6:35 PM EDT
Hi Baolt - just wanted to mention that I will also be updating my fcrecast shortly - immediately following the release of August global S/C sales by the WSTS scheduled for October 4th.
Therefore, "stay tuned" for my latest sales growth forecast estimate based upon the latest sales numbers from the WSTS (World Semiconductor Trade Statistics organization.
Mike Cowan, independent S/C industry analyst (and developer of the Cowan LRA forecasting model)
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Baolt
9/30/2010 7:47 PM EDT
Hello Mike, i am honored that my post took your attention. Very pleased to meet.
Unfortunately I am not a subscriber of WSTS releases however now even more curious about their report accordingly your update of course.
The biggest question is that rather we should be optimistic as future horizons, SC inteligence or keep being pessimistic as isuppli, ic insights about 2010 market forecast?
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Cowan LRA Model
9/30/2010 8:40 PM EDT
Baolt - fyi the WSTS monthly global S/C sales numbers are published on the WSTS website at the following URL = http://www.wsts.org/public/files/bbhist-24.xls and thus "available" to all!
Check it out.
Regards, Mike C.
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the_floating_ gate
9/30/2010 11:34 PM EDT
"Sometimes I think we try to read too much into the importance of growth deltas to the point that it starts to affect perception and influence behavior. "
32% versus 35% is not significant; an increase from 20% to 35% is significant
http://www.theregister.co.uk/2010/03/08/isuppli_2010_chip_forecast/
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the_floating_ gate
9/30/2010 11:36 PM EDT
This sucks - it appears you can not put in links
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Cowan LRA Model
10/1/2010 6:58 AM EDT
Hi the_floating_floating_gate - do not "fear," Google is here!
By highlighting the URL you pointed us to it "pops up" in the Google search box and "firing on" the search button takes YOU right to the article you invoked. Isn't technology great!!!!
Mike C.
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the_floating_ gate
10/2/2010 2:17 AM EDT
"If capital spending is any gauge, then the semiconductor industry still has a way to go to a full recovery. iSuppli says that chip makers will spend 46.8 per cent more on wafer baking equipment in 2010 than they did last year, but even with that the capital spending will be less than half the levels set by the industry in 2007 and 2008. Chip makers are focused on moving to new technologies right now, not building out capacity for existing technologies. ®"
"research" analysts and WS analysts created a perfect catch 22 scenario - either they spend too little or they spend to much.
I supply increased the forecast from 21% to 35% - and now down to 32% and now the sky is falling.
Pretty pathetic
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