PHOENIX -- Continued increases in average selling prices for integrated circuits in September are pointing to an end to the current industry slump and setting the stage for a surprisingly strong recovery next year, according to a new report from Semico Research Corp.
The Phoenix-based research firm is now predicting a 21% increase in total semiconductor sales in 2002, which is far greater than most other predictions of modest recovery next year. In fact, most other industry analysts and research groups are calling for growth next year in 1-to-6% range after this year's severe downturn.
Semico's November newsletter said recent data from the Semiconductor Industry Association shows the downturn will finally hit its bottom in the fourth quarter because chip sales continued to show steady improvements in September. Semico also said weekly run rates for both unit shipments and dollar revenues continued to improve since July.
Earlier this month, the SIA reported that September's worldwide chip sales dropped 2.5% to $10.22 billion from $10.48 billion in August. The drop was a slower rate of decline than in August and July, according to the San Jose-based trade group (see Nov. 1 story).
Semico's newsletter said IC average selling prices increased from a low point of $1.50 in July to $1.70 in September. The rise in ASPs is helping to set the stage for sequential growth after the industry hits the bottom of the downturn in the fourth quarter, said the Phoenix research firm.
Other factors are also pointing to sequential improvements in chip revenues, Semico said. The inventory buildup that contributed to the 2001 downturn has "been used up or will need to be written off for denser or higher performance parts for new designs," said Semico today.
The research firm said delays in new chip-making plants and capacity will also cause shortages, particularly for new ICs. And, Semico is predicting that an overall economic recovery will help boost semiconductor revenues in the second half of 2002.
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