Hit outlook ‘reset’ button and be ready for IC boom in 2010, IC Insights urges
The IC industry needs to reset its attitude toward market outlooks and could be on the cusp of an all-out IC market boom for 2010, IC Insights says.
By Suzanne Deffree, Managing editor, news -- EDN, January 6, 2010
Borrowing a term from General Electric CEO Jeff Immelt, IC Insights today is advocating the idea of a “reset economy” and is suggesting the IC industry may be in for a market “boom” in 2010.
Immelt’s belief is that businesses, governments, and consumers will operate very differently in the post-crisis economy and that corporations will need to adjust to their practices and views to the new environment. According IC Insights, this reset philosophy can be applied to the worldwide IC industry outlook.
“In only 12 months, the IC industry endured the most volatile quarterly swings in its history,” Bill McClean, president of the research company, said in a statement. “While Q4 2008 and Q1 2009 set records for dramatic sequential quarterly IC unit shipment declines, Q2 2009 and Q3 2009 set records for the fastest-ever sequential quarterly growth for IC units! After such a period, it is probably best to step back and take a fresh look at the IC industry as it stands today and assess what can be expected for 2010.”
And what is a possibility for 2010 is massive market growth, the company said. Among the reset IC industry points IC Insights made was that the Americas IC market was the only major region to show growth in 2009, thanks in large part to the memory market.
Capital spending for memory devices is forecast to more than double in 2010, IC Insights said, further warning, however, that the expected increase may not be enough to avert memory shortages and significant price increases in 2010.
IC Insights also pointed out that sales in the NAND flash memory market surged 20% in 2009 and that greater growth is expected in this year and in 2011. Also, DRAM ASPs (average selling prices) in Q4 2009 were 65% higher than in Q1 2009, IC Insights said, adding that it believes this is only the beginning of the trend toward higher DRAM ASPs. This memory growth also managed to occur in a year when PC unit shipments were flat and cell phone shipments were down.
“Considering that the global economy endured its worst recession in 63 years (since 1946) in 2009, flat PC unit shipments were quite an amazing accomplishment,” McClean said. “Moreover, cell phone unit shipments were down only 5%. Now consider that both PC and cell phone unit volume shipments are forecast to increase at double-digit rates in 2010. What effect will this have on the IC industry? The industry could be on the cusp of an all-out IC market boom for 2010.”
According to IC Insights, MPU sales reached almost $10 billion in Q4 2009, an all-time record high. “This record high was set during the worst global recession since 1946. What happens when the PC market takes off in 2010?” McClean asked.
IC Insights noted the worldwide Q4 2009 IC market was 47% greater than it was in Q1 2009. Overall, the worldwide IC market declined 10% in 2009, according to the company’s data.
“There has been a 180-degree turn in the fortunes of the IC industry in the 12 months from December of 2008 to December of 2009,” McClean said. “It’s time to reset your outlook for the new and very different IC industry of the future!”
The market research company has continuously encouraged the industry to take a more positive view than most during the recession. Starting in late 2008 and throughout 2009, IC Insights urged the semiconductor industry to “think quarterly,” opposed to annually, as to an economic recovery. In that theme, the research company in November reported a Q3 2009 19% sales gain for the top 20 suppliers.
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Immelt is part of the Obama Marxism machine and contributed (via GE) heavily to the Obama campaign. As payback, GE Capital got TARP bailouts, GE Engines got to keep a fighter engine contract and GE (partnered with Intel) get the ObamaCare medical records business. What Immelt says and what he means are two totally different things.
Barack Obama - 2010-6-1 14:43:00 PST -
Bill McClean is one of the few analysts in the semiconductor industry to recognize we are in a strong rebound after an over-reaction to the recession. I agree 2010 market growth will be strong and shortages will occur in some products. More information is available at www.sc-iq.com
Bill Jewell - 2010-6-1 13:14:00 PST -
Will "the new and very different IC industry of the future" (TNAVDICIOTF) be recalling substantial numbers of employees who were laid off in the recent recession?
Will TNAVDICIOTF be hiring increased numbers of new college graduates?
Will TNAVDICIOTF be hiring more interns?
PJD - 2010-6-1 12:33:00 PST
