Future Horizons,
Europe's leading semiconductor analyst company, reckons that 2009
will see a two per cent contraction in market size, but no re-run
of the disastrous downturn of 2001.
"September marked the start of the 11th chip industry slowdown",
says Future Horizons, "we now expect Q408 to be down 6 per cent on
Q308, making 2008's growth just 2.2 per cent on 2007 - the fourth
consecutive year of single digit market value growth."
The sole cause of downturns is over-supply, says Future
Horizons, caused by a slump in demand, over-building of factories
or excessive build-up of inventories. In 2001, all three
happened.
"The 2001 slowdown was unique in that it was triggered by both
demand and supply-side issues simultaneously, namely the collapse
of the dot-com inflated demand euphoria, a 9-11 driven economic
slowdown, and a massive inventory burn just as a huge amount of
excess capacity was coming on stream. Everything that could have
gone wrong did go wrong", says Future Horizons.
2009 will be different. There is no serious overcapacity with
pre-slowdown utilisation rates in the 90s of per cent, and capex
cut-backs implemented 12-18 months before the slowdown. There is
little sign of inflated demand, with IC units running at or below
the 10 per cent per year long-term trend line and no serious excess
inventory in the supply chain.
So 2009 will see a two per cent contraction but, says Future
Horizons: "The 2010-11 rebound could be much stronger than most
people currently feel."
See also:
Credit Crunch: Semiconductor light amid economic
gloom, in which Electronics Weekly highlights
some recent stories that run counter to the prevailing industrial
outlook.