SAN FRANCISCO -- At an event, I ran into VLSI Research CEO G. Dan Hutcheson.
Hutcheson is bullish about the IC industry, although VLSI has not changed its gloomy forecasts. The fab tool market for 2009: Minus 44.2 percent. The IC market: Minus 12.4 percent.
But based on my conversation with Hutcheson--and a new report from the firm--here's the conclusion: There are four positive signs and two negative signs in the market. Here's why the analyst is upbeat and worried:
1. Upturn seen
''Weekly IC billings rose to $3.3 billion, breaking a three-week slump in IC billings. This is very positive because July is typically a weak month. IC billings were up 6 percent on a weekly basis. Compared to a quarter ago, IC billings were up 17 percent. Pricing was up 12 percent on a week-over-a-quarter ago basis, breaking a long stretch of IC ASP weakness and units were up 4 percent. So the upturn remains intact and is starting to look like the second half will be a hot one.''
2. See spot run
''DRAM had another strong week as spot prices rose across the board amid shortages. Some of the shortages are driven by back-to-school demand, though capacity reductions are also a factor. NAND Flash also had a good week as demand continued to improve due to seasonal effects.
''However, NAND pricing could be under pressure because supply is increasing amid rising utilization rates and process migration. MPUs were on a roll again, despite a slight drop in the overall price-per-GHz. So things are looking pretty darn good in the spot market, which bodes well for the remainder of the year.''
3. China boom
''The good news is that the Chinese stimulus is having a very positive effect on electronics demand. This is a China-driven (economic recovery)--not a U.S. one.''
4. IT upgrades coming?
''Windows 7 is coming,'' (which could impact the long-awaited IT upgrade cycle.)
5. New killer app
''Office communications is about to explode with something called Unified Communications. Basically, UC or Unified Communications headsets are wireless earpieces that connect you into the corporate phone system like a Bluetooth headset.
''Cisco says they saved $1 billion with UC from floorspace/real-estate because they needed fewer cubicles. It turns out that about 25 percent of cubicle space is empty on any given day, so by unifying cellular and PBX, they were able to eliminate this waste. Currently the headsets sell for $200-300 per headset. With 100 million potential users, it looks to be about $1 billion in chip sales, which doesn't change the world, but it sure makes it more interesting.''