Bullish Penn sees chip market growth of 8% in 2012

Peter Clarke, EE Times -- EDN, January 23, 2012

LONDON -- Malcolm Penn, founder and chief analyst with semiconductor market analysis firm Future Horizons Ltd, has predicted that the global chip market will rise on an annual basis by 8% to $323.2 billion in 2012. Penn said that after a flat first quarter he expected the chip market to bounce back in the second half of the year.

This high single-digit percentage growth is a "safe bet," said Penn who indicated that annual growth "could easily be 20%." He argued that the fundamentals of the industry favored a rebound after 2011 had been derailed by natural disasters in Japan and Thailand and global economic uncertainty.

Penn said that it looked like 2011 would show close to zero growth -- 0.3% -- with global chip sales revenue of $299.2 billion. "Again we are not going to beat the $300 billion number," Penn said.

For 2013 Future Horizons is even more bullish. Penn forecast 20% annual growth, arguing that end-user demand remains strong globally due to an ascendant Asian and Chinese middle-class hungry for electronic goods that will maintain the long-term 11% annual rise in shipment volumes. In addition, average selling prices for ICs have been creeping up for several quarters, Penn said.

An in the near term companies have been running their supply chains almost empty and must start to rebuild inventories, Penn argued. The actual figure for growth in 2012 -- whether it is 8%, 10% or more -- partly depends on when these positives come to bear.

Penn is more bullish than most other market analysts. Handel Jones of International Business Strategies forecasts the chip market contracting in 2012 after a 6 to 7% rise in 2012. IC Insights expects the semiconductor industry to grow about 7% in 2012 while Mike Cowan estimate for 2012 is 5.9% growth referenced off a 2011 sales forecast estimate of $301.16 billion.

The World Semiconductor Trade Statistics organization is forecasting 2.6% annual growth in 2012; IHS iSuppli predicts 3.2% growth, and Gartner Inc predicts 2.2% growth. Morris Chang, the much listened to chairman and CEO of TSMC, has recently predicted the total market will grow by 2%.

This story was originally posted by EE Times.