Both TSMC and Future Horizons forecast 1% growth for the semiconductor industry this year at the IEF2011 meeting in Seville today.
"If the politicians can fix the general economy then the semiconductor industry will be in good shape because it has no excess inventory, no excess capacity and no over-build," said Malcolm Penn, CEO of Future Horizons.
Capacity utilization is around 90% and the big positive for the future of the industry is that the historical bane of its fortunes – over-build, leading to surplus capacity, leading to low prices, is now unlikely to happen.
"We’re not going into periods of excess capacity," said Penn, "it’s a much better thing for the industry – it’s not a negative sign - but it means you can’t rely on getting everything you want when you want it."
A problem for the industry is that it has stopped tracking demand. "WSTS stopped tracking orders; it stopped the book-to-bill ratio," said Penn, "it’s simply looking historically two months later at what’s already happened."
Nonethelessthere are still warning signs. "You get two to three months warning of trouble in the market and three to four quarters warning of a shortage," said Penn, adding that companies typically take scant notice of the warnings.