Is end demand for semiconductors beginning to grow? Some analysts seem to think that Q3 could see a return to growth in real end-user demand.
The rebound on the SOX (The Philadelphia Semiconductor Index) which saw the index go from a 190 low in mid-March to over 260 was initially attributed to a re-stocking of inventories after users had over-aggressively de-stocked in Q408 and Q109 when it looked as if the world economy was in melt-down.
But, at the time of the SOX's initial rise, many analysts warned that this rally had little or nothing to do with a return of sustained end-user demand. It could evaporate, they warned, once normal inventory levels were reached.
Now, it seems, analysts are talking about a return to sustained end-user demand with Wachovia saying chip-makers are ramping production over and above current demand to be able to deal with expected demand in Q209.
"We expect that internal inventory at chip companies will rise in the June quarter, to support further strengthening in demand in the September quarter," said Wachovia analyst David Wong.
At Caris & Co the word was that the other semiconductor analysts are 'overly cautious'. The company expects Q2 and Q3 figures to come in better than expected.
The silicon foundry industry which, as the semiconductor industry's manufacturing sub-contractor, is a weather cock for chip demand, has been reporting hugely better orders for Q2 than Q1.
It won't happen.
This market is fundamentally flawed now. Consumers are tired of tech toys. My most advanced PC with the most advanced processor and the microsoft windows vista takes 15 minutes to boot while my good old DOS PC from early 90s takes just 2 minutes to get ready.
Advancement in this technology has been one sided and cancerous for long time. We do not need a killer app anymore, we need a revolutionary app. Otherwise, combined declining market demand and slowed down scaling will put us all on the streets playing guitar for food and rent.
Too pessimistic? Just wait.
My God, game-over, that is pessimistic. May I be allowed two attempts at a light at the end of the tunnel? 1. Connectivity - there's huge room for improvement here and always-on, £100, pocketable, net-books might engage consumers; 2. Scaling - this may resume at its previous pace if any of the emerging technologies like carbon nanotubes, graphene transistors, spintronics, polymer, small material organic, single electron etc ever get commercialised.