See also: Credit Crunch: Semiconductor light amid economic gloom
An increasingly strong semiconductor market rebound is predicted for the second half of the year. IC Insights reckons that the market will regain its 2007 level in 2011.
'The second half of this year is expected to yield seasonal increases in PC, cellphone, and consumer electronic system sales as well as a jump in IC orders due to inventory restocking. Moreover, the global economy is forecast to transition from negative to positive growth in the second half of 2009', says the company.
IC Insights believes that three important positive forces that are likely to drive positive growth in the worldwide economy later this year are still in place:
- Over $2trn in worldwide economic stimulus is due to be spent over the next two years. At of end of March 2009, less than 10% of the worldwide stimulus money had been spent
- Record low interest rates in the U.S., U.K., South Korea, etc.
- Low oil prices.
In IC Insights' opinion, global recessions cause pent-up demand for electronics. With a strong electronic systems and semiconductor industry rebound following every one of the past four global recessions over the last 30 years, there is good reason for optimism.
Moreover, IC Insights believes that a similar "global-recession-rebound" will once again be evident in 2010 and 2011 with the semiconductor market registering double-digit growth in each of these years.
In glaring contrast to other forecasters that do not expect the IC market to reach the 2007 level at anytime over the next five years, IC Insights believes that, using the scenario shown below, the worldwide IC market will surpass the 2007 level in 2011.
In IC Insights' opinion, given the extreme and unprecedented cutbacks in IC industry capital spending in 2008 and 2009, a surge in IC average selling prices (ASPs) in 2010 and 2011 is almost guaranteed. This surge in IC ASPs will be the driving force for double-digit growth in the IC market over the next couple of years.
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.