The semiconductor industry is engaging in ‘business, economic and industry madness’ by not hiking its prices, according to Europe’s leading semiconductor analyst, Malcolm Penn, CEO of Future Horizons, in the company’s June market report.
‘The industry is now in the full flood of a classic market boom’, says the report, ‘order books are full, customers are building stocks, double ordering is rife, capacity is strained, lead times increasing and deliveries are stretched. Yet, memory aside, all other segment ASPs are still falling!’
“This is chip industry nonsense at its worst”, says Penn, “time to increase semiconductor prices everywhere. It is absolute business, economic and industry madness to keep decreasing prices in a tight supply market.”
The report continues: ‘April set the ball rolling for a blockbuster second quarter making what will now be five successive quarters of growth. Our 3 percent Q2 growth forecast looks increasingly timid, with 6-8 percent more likely.’
Virtually all forecasters are now pitching 2010’s growth at the 30% level.
‘The industry boom-bust cycles persist and will continue to do so while demand dynamics are measured in weeks and the supply-side in
quarters making it impossible to ever balance supply and demand,’ says the report.
‘The real issue now is “What about 2011?”’, asks the report, ‘we are clearly now in a boom and the next phase is bust, but when, how deep and how fast will it collapse?’
Answers to be given at the Future Horizons’ Mid-Term International Forecast Seminar in London on 20th July.