LONDON – Malcolm Penn, founder and principal analyst with consultancy Future Horizons (Sevenoaks, England), sees a return to a "normal" 6 percent growth pattern for the semiconductor market in 2011. This will come after 2010 displays growth of more than 30 percent, as a recovery from a poor 2009.
Speaking at a one-day presentation held here Penn said normal growth corresponds to somewhere between 1.5 percent and 10.5 percent growth. Penn insisted that the visibility into such numbers a year out can never be precise but that the key factors are the trends, from which the general sweep of the numbers can be seen.
Nonetheless Penn was prepared to put his name to 6 percent growth in 2011, but with the caveat that there is plenty of upside to that number. "Just because 6 percent is lower than 34 percent does not mean 2011 is a bust cycle, quite the opposite. [It's] business as usual," said Penn.
The 6 percent figure is a second halving of the 2011 figure by Penn. In July 2010, Penn cut his prediction for 2011 from 28 percent to 14 percent describing the move as a "recalibration" of the speed of the 2009-2010 recovery (see Penn raises 2010 chip market forecast, cuts 2011).
Penn's prediction of 6 percent growth goes along side an estimated 1.5 percent increase in average selling prices (ASPs) for chips. But Penn is a strong advocate that the ASPs falls that dominated the previous decade cannot continue forever. Indeed he states that ASPs have turned a corner and have been rising since 4Q09. Penn conceded that ASPs could rise by more than 1.5 percent in 2011 with a direct impact on the semiconductor market value. "Given the current 2010-11 fab-tight situation the upside for 2011-12 is huge, but there is a memory wildcard, which could take $10 or $15 billion out of the market."
In general memory is expected to see some price attrition and over supply in 2011, but the memory manufacturing capacity operates quite separately to the logic market, said Penn.
Other market watchers are offering a spread of between 2.3 percent offered by Mike Cowan and 10 percent predicted by IC Insights.
Malcolm Penn is around. I was with him this morning at a meeting of Silicon Southwest in Bristol. He is now predicting 2011 will be a 1 percent growth year and that 2012 COULD be a bounce year showing 20 percent growth.
As we approach the end of 2011, little has been heard from our gypsy friend Malcolm Penn who ran away from his fortune telling home to join the test company circus. No word yet if he's past the test there or not, all we know is that he has fallen very silent about his 2011 growth prediction of 6% being off by over 300%! Perhaps he should take his crystal ball to work one day and have it "tested".
Hey! think of analysts as your local weatherman who can couch computer modeling observations with such soft adjectives as mild, sunny, humid, slushy and so forth. You don't get anxious about bad forecasts unless your life depended on it, right? So with analysts...a little down, a little up; it's all based more on human emotions and less on reasoning. I predict that somewhere there is a silver lining in an analyst's cloud.
You've got it.
Engineers and market researchers work to different rules. Mainly because engineers stick to predictable linear systems and market researchers prognosticate over chaotic, and difficult to measure data.
But if there was ever a market researcher with the accuracy of an engineer he or she would not be in business for long. They would clean up on the world's stock exchanges and future's markets and retire.