LONDON – Both 2011 and 2012 will be growth years for the global semiconductor industry before a potential downturn in 2013, according to analysts Bill McClean of IC Insights and Malcolm Penn of Future Horizons Ltd.
The two analysts, speaking at the ISS Europe conference held in Grenoble, France, this week, took similar positions and ascribed the two year boom to a return to normal unit demand allied to flat-to-increasing average selling prices (ASPs) for chips.
McClean, CEO of IC Insights, predicted a long-term compound annual growth rate for the chip industry of 9 to 10 percent due to stable ASPs over the next few years. McClean said the difference between IC Insights and Gartner and some other forecasters is that they see ASPs continuing to fall by about 4 percent each year dragging the typical 10 percent unit growth in the chip market down to just 5 or 6 percent growth in monetary value.
Malcolm Penn, founder and CEO of Future Horizons, said there is a 10-year cycle in ASPs and that a turning point has been reached. Growth in ASPs has been happening since the fourth quarter of 2009, he said.
Penn predicted a 9 percent growth year for 2011, up from the 6 percent growth he was predicting in December 2010. "ASPs are recovering and it could easily go into double digits," he said. "Manufacturing capacity will be tight in 2011 and 2012. Fab capex is not yet overheating," he said despite bullish plans from such companies as Intel, Samsung, and TSMC. Penn added that 2012 would be even better at 16 percent, before a contraction in the market by 2 percent in 2013 as overcapacity does strike the market.
These predictions always amaze me. We know that the industry is cyclic, so we can expect another downturn in two to three years, so they will probably be right. The amount of manufacturing capacity may not be the cause of the cycle. It seems to be more of a result.
I have to agree with you there. It seems that these predictions are based entirely on expected capacity, with no regard for macroeconomic conditions or demand for automobiles, consumer electronics, etc.
I wonder what if any effect the overall world economy has (or should have) on the multi-year forecasts? While I do not expect the next great gadget around the corner, what would that next "got to have it" product do to the projected or realized growth numbers? If there was a strong need for sdram or arm devices that was fueled by a set-top box like production numbers device wouldn't have a profound impact on ASP and growth? This article reads like: the industry is cyclical and that trend will continue..
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