So here we are, two months into the second half of the year when things should get better. Poor results in the first half are traditionally spiced with the prediction that things will turn up in the second. As STMicroelectronics’ chief economist, Jean-Philippe Dauvin says: “I wish I could always live in the second half of the year.”
Well we’re two months into this Nirvana period, and it doesn’t feel all that wonderful. Mind you, it doesn’t feel all that bad, either. According to analysts Future Horizons, May was ‘disappointing’, and June was ‘a kick in the pants’ but still the units grew 7.7 per cent in the first half. If only the prices hadn’t declined 4.6 per cent it would have been a great first half.
The good thing is that no one expects there to be overcapacity in the second half, and Future Horizons predicts 90 per cent fab utilisation rates. ‘Structurally the industry has rarely been in better shape,’ says Future Horizons’ August Update.
It’s just prices. If only they wouldn’t fall so fast. But the industry has taught its customers that costs decline, and it’s second nature for the customers to ask for constantly lower prices.
If only someone could think of a way to change that customer expectation, they’d be a semiconductor industry hero.
And it would always seem like the second half of the year.
TOMORROW: THE TEN BEST LOGIC CHIPS
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