'In a remarkable turnaround, July IC sales and unit volume numbers indicate that the IC industry is in the midst of a solid, V-shaped rebound,' reports US analyst house IC Insights.
The upturn is not limited to one or two areas, but is being experienced across many product lines including DRAM, NAND flash memory, analogue, and microprocessors, as well as the overall IC industry.
'Though some of the markets were down on a year-over-year basis, the real eye-opening trends are revealed when looking at how far IC markets have come since the beginning of the year,' says the report, 'growth has been explosive in the 7-month period from January to July 2009 for both dollar volume and unit volume.'
IC Insights believes the market for ICs is set up for strong growth continuing into 2010 and 2011. Several companies have hinted of stronger bookings and/or production ramps through the balance of 2009 and 2010, global and US GDP outlooks have moved well into positive territory and, in the US. about 60% of the $750bneconomic stimulus package is expected to be spent in 2010 and 20% in 2011 which, says IC Insights are: 'Good reasons to believe the economic engine will move into a higher gear'.
However many wafer fabs and production lines have closed since 4Q08 (31 fabs have closed according to The Information Network) resulting in reduced industry-wide capacity as the market returns to health.
Capacity utilisation jumped to 78% in 2Q09 from 57% in 1Q09 and is forecast to increase to around 90% by the end of the year.
'With significant IC unit demand on the horizon and little capital spending being allocated for new/upgraded facilities, industrywide capacity utilisation stands a very good chance of being maxed out in the coming months, resulting in longer lead times, spot shortages, and escalating average selling prices throughout the industry', say the analysts.