Asia growth may soften impact of semi downturn

MANHASSET, N.Y. — With the Asia-Pacific region triggering much of the recent growth in semiconductor demand, the industry slowdown underway may be less severe than in 2001 when all global regions experienced a boom-and-bust cycle, according to market research firm Advanced Forecasting (Saratoga, Calif.).

The firm said that during July, IC supplier revenue in Asia grew 43 percent year over year, outpacing the 22 to 25 percent growth worldwide. Advanced Forecasting noted that by comparison, all global regions were growing over 33 percent year-over-year in 2000, thus producing a steeper downfall when the recession hit a year later.

"The current slowdown felt across the industry may reduce the severity of an impending recession as the industry attempts to realign itself with underlying demand, as was the situation in 2002, where overheating during the first half-year caused a correction in the second half," stated Rosa Luis, director of marketing and sales for Advanced Forecasting.

Still, all signs indicate the global semi industry is stumbling, the firm said. Growth rates in IC units and revenue have diverged, with revenue increasing more rapidly than units, as was the case prior to the 2001 recession.

IC suppliers have also become more nervous recently because revenue growth appears to be leveling off. Many suppliers have revised their guidance for the current fiscal quarter as unit demand has fallen during the summer months.