See also: International Electronics Forum 2009 - News Roundup
Allocation is coming. That was the word from the Future Horizons' International Electronics Forum (IEF) 2009 in Geneva today.
"The 'A' word is back on the agenda", said Penn, "and it will hit the industry by surprise."
The reason for the impending spectre of allocation is the disastrously low level of the semiconductor industry's capex. "We've never seen a time when capacity investment has been so low", said Penn.
The normal ratio of capex to sales over the industry's history is 20%. Last year it was 12% and this year it will be 4%. The industry's overall capacity is now 14% less than it was in Q308.
"If you double capex next year it's still too low", said Penn, "the question is: How will a battered and bloody semiconductor manufacturing equipment cope?"
"The big winners in this will be the foundries and the biggest winner will be TSMC because it's the biggest foundry", said Penn, "the other foundries are too small."
As to this year, the semiconductor market will drop 14%. "We pretty much know now what the year is going to be doing", said Penn.
His forecast for Q309 is +12%; for Q409 it's +3% . It's all a lot better than was expected at the turn of the year.
"Everything changed in Q2", said Penn, "we went from meltdown in Q408 to stabilisation in Q109 and rebound in Q209 - from meltdown to rebound in thee quarters".
The market dropped 24% in Q408 and dropped another 15% in Q109 then grew 17% in Q209. It was only the second time in the industry's history that it's had a 17% quarterly increase.
What saved the industry from disaster was that it was in better shape to weather a recession than usual. "Chip industry went into the recession in good shape", said Penn, "it was lean and mean with tight capacity."
All of which means 2010 looks like being a good year. "Given the impending 2010 fab shortage, the upside for 2010 is huge", said Penn.
He reckons the value of the semiconductor market will grow 19% in 2010, 28% in 2011 and 18% in 2012.
See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.