Future Horizons reckons the semiconductor industry will grow 36% this year and will break through the $300bn threshold on December 14th 2010, Future Horizons’ CEO, Malcolm Penn, told the IFS-MT 2010 seminar in London this morning.
Penn reckons the quarterly growth pattern will be: 2.9% in Q1; 8.3% in Q2; 8% in Q3 and 2% in Q4.
The 10% market fall in 2009 followed by a 36% rise this year looks like a classic semiconductor industry boom/bust cycle, but it’s not, according to Penn.
"It was a three month pause, not a classic semiconductor recession", said Penn, "and the industry did an appalling job of managing it. It carried on cutting back, closing factories, laying off people, nine months after things were getting back to normal."
Penn added: "It’s little wonder that screw-ups are starting to happen. There will be many more Nissans to come over the months ahead."
The reference is to ST’s delinquency on an order for engine control ASICs used by Nissan causing the car company to close six car plants.
"Nissan thought they were at the front of the line when the allocation was made. They didn't get it", said Penn.
The good news for the semiconductor industry is that ASPs are on an upward trend, said Penn. Capex is up but it’s too little too late to stop the recovery, and "chip companies are making tons of money – except those which are loaded up with debt" i.e. the private equity-owned NXP and Freescale.
For next year, Penn reckons growth will be 14%. The start of the next Trash Cycle caused by excess capacity is likely to be 2012.
"We will over-build capacity because we can’t get it right. We will get a one year warning of over-building when capex gets in sight of the long-term trend," said Penn, "but everyone will ignore it."