Future Horizons has revised its semiconductor forecast for the year to 4-5 per cent growth with four to six per cent growth for 2009.
"On the one hand at a stroke the world's financial ecosystem became dysfunctional yet on the other hand the chip industry continues to march on", says Malcolm Penn, CEO of Future Horizons in the company's October semiconductor industry report.
However, the effect of an IMF forecast which is now looking at 2009 world GDP growth of 3 per cent, with 6.1 per cent coming from emerging economies and 0.5 per cent coming from the advanced economies, makes the company cautious on 2009.
However the IMF forecast of 3.9 per cent world GDP growth for this year, which is higher than the IMF's 3.7 per cent forecast made in March, helps to account for the fact that the chip market is still growing.
The Future Horizons report points out that the chip market is not indissolubly wedded to the economy. 'There have been seven instances in the last 22 years where the chip market has grown in value during a period of slowing economic growth and two occasions when the market has declined in a period of GDP growth', says the report, 'IC units have exhibited three periods when they grew in the face of a GDP decline and five occasions when the units declined despite growth in the world GDP. The economy is thus not quite king inventory, excess capacity and ASPs also play a role.'
Fundamentally, the semiconductor industry stays strong, reckons Future Horizons. 'Inventories do not seem to be seriously bloated, wafer fab capacity utilisation levels are high capital expenditure is low and has been now for several quarters, and ASPs are in the midst of a long-term structural recovery phase,' says the company's report.
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