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Dylan - the Cowan LRA Model's most recent (and final) sales growth forecast ...
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Analyst warns of chip downturn in 2013
Dylan McGrath
1/17/2012 10:27 PM EST
HALF MOON BAY, Calif.—The semiconductor industry is expected to grow by 6 to 7 percent this year, but will contract in 2013 as the U.S. economy slows, according to Handel Jones, founder and CEO of International Business Strategies Inc. (IBS).
Speaking at fab tool vendor trade group SEMI's annual Industry Strategy Symposium here Tuesday (Jan. 17), Jones said IBS expects memory sales to grow by 11 percent this year as pricing improves and non-memory chips to see 6 percent growth in 2012.
But Jones said he expects the U.S. economy will be propped up this year by continued borrowing as U.S. President Barack Obama seeks re-election and the Republican-controlled U.S. Congress tries to tries to get him replaced with their own candidate. But following the election, Jones expects the U.S. to adopt austerity measures to stem runaway deficits in 2013, causing a slowdown in the U.S. economy.
"How deep [semiconductor industry contraction] could be could be difficult to predict," Jones said. "I think it could be fairly steep."
IBS's forecast of 6 to 7 percent semiconductor growth in 2012 is higher than some other market research firms have predicted in the past several weeks. IC Insights Inc. expects the semiconductor industry to grow about 7 percent this year, while IHS iSuppli predicts 3.2 percent growth and Gartner Inc. predicts 2.2 percent growth.
IHS expects semiconductor revenue to grow another 6.7 percent in 2013, while IC Insights believes chip sales for the year will be similar to 2012.
"Longer term, we do see a lot of positives," Jones said Tuesday. "One problem in the industry now is that a lot of companies are generating low profits," Jones said, adding that they are pricing products low to grow market share.
Jones said he expects one or two chip companies to file for insolvency in 2012.
Jones said chip makers have had a lot or problems with yield at the 28-nm node, particularly with high-k metal gate process technology. He said he expects the industry will also have difficult at the 20-nm node. "We think 20 [nm] will be a very tough technology," Jones said.
Jones outlined a "triple threat" facing the semiconductor industry, including the incorporation of 3-D packaging with through-silicon-vias (TSVs), the adoption of 3-D FINfet transistors and the looming migration to 450-mm wafers.
Jones said the move to TSVs has thus far been slower than expected.
"As we go forward now, with each generation of technology, the barriers go up," Jones said. "The reality is that you can't rely on past experience to solve these challenges."
Among a smattering of other longer term predictions, Jones speculated that Qualcomm Inc. would be a $30 billion company by 2015 (the company had chip revenue of about $9.5 billion in 2011) and said that South Korea's Samsung Electronics Co. Ltd. would continue to grow its chip sales, challenging Intel Corp. for the No. 1 position in semiconductor sales.
Speaking at fab tool vendor trade group SEMI's annual Industry Strategy Symposium here Tuesday (Jan. 17), Jones said IBS expects memory sales to grow by 11 percent this year as pricing improves and non-memory chips to see 6 percent growth in 2012.
But Jones said he expects the U.S. economy will be propped up this year by continued borrowing as U.S. President Barack Obama seeks re-election and the Republican-controlled U.S. Congress tries to tries to get him replaced with their own candidate. But following the election, Jones expects the U.S. to adopt austerity measures to stem runaway deficits in 2013, causing a slowdown in the U.S. economy.
"How deep [semiconductor industry contraction] could be could be difficult to predict," Jones said. "I think it could be fairly steep."
IBS's forecast of 6 to 7 percent semiconductor growth in 2012 is higher than some other market research firms have predicted in the past several weeks. IC Insights Inc. expects the semiconductor industry to grow about 7 percent this year, while IHS iSuppli predicts 3.2 percent growth and Gartner Inc. predicts 2.2 percent growth.
IHS expects semiconductor revenue to grow another 6.7 percent in 2013, while IC Insights believes chip sales for the year will be similar to 2012.
"Longer term, we do see a lot of positives," Jones said Tuesday. "One problem in the industry now is that a lot of companies are generating low profits," Jones said, adding that they are pricing products low to grow market share.
Jones said he expects one or two chip companies to file for insolvency in 2012.
Jones said chip makers have had a lot or problems with yield at the 28-nm node, particularly with high-k metal gate process technology. He said he expects the industry will also have difficult at the 20-nm node. "We think 20 [nm] will be a very tough technology," Jones said.
Jones outlined a "triple threat" facing the semiconductor industry, including the incorporation of 3-D packaging with through-silicon-vias (TSVs), the adoption of 3-D FINfet transistors and the looming migration to 450-mm wafers.
Jones said the move to TSVs has thus far been slower than expected.
"As we go forward now, with each generation of technology, the barriers go up," Jones said. "The reality is that you can't rely on past experience to solve these challenges."
Among a smattering of other longer term predictions, Jones speculated that Qualcomm Inc. would be a $30 billion company by 2015 (the company had chip revenue of about $9.5 billion in 2011) and said that South Korea's Samsung Electronics Co. Ltd. would continue to grow its chip sales, challenging Intel Corp. for the No. 1 position in semiconductor sales.
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Cowan LRA Model
1/18/2012 10:23 AM EST
Hi Dylan - since in your above article summarizing Handel Jones' outlook for this year's (2012) semi sales growth you also invoke other market watchers' expectations, I thought that I would likewise "chime in" too. The latest Cowan LRA Model's semi sales growth forecast estimate for 2012 is 5.9% which is referenced off a 2011 sales forecast estimate of $301.16 billion. By the way 2011's actual sales result will be publised at the beginning of next month (February) by the WSTS in their December 2011 HBR.
Mike C. (independent semi-industry analyst and developer of the Cowan LRA forecasting model)
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dylan.mcgrath
1/18/2012 11:12 AM EST
Thanks Mike. Sorry for leaving you out. I will add this to the main text.
What's your expectation for 2011 final numbers? I am hearing 1-2% growth in the end.
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Cowan LRA Model
1/18/2012 11:37 AM EST
Dylan - the Cowan LRA Model's most recent (and final) sales growth forecast expectation is 0.95 percent. This number is based upon November's lower than expected actual sales of $22.531 billion.
By the way details of my latest forecast numbers for both 2011 and 2012 were contained in an e-mail I dispatched to you (and Peter) earlier this month (Jan 6th to be exact)
Mike C.
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