Could the IC market be headed back to its traditional 14% CAGR? That was suggested at IFS 2010 in London this morning.
"The semiconductor market is going back to double digit annual growth rates for the next five years. That's not that far from the long-term industry growth rate of 14%", said Malcolm Penn, CEO of Future Horizons.
"The fundamentals of the chip industry are fantastic", said Penn, "we're starting the recovery with shortages. Capacity is still tight and capex is still weak. There are no significant capacity increases in the pieline for the next 12 months. This is as good as it gets."
The problem is people can't believe what they're seeing. Some analysts are still talking single digit growth this year. "That's Mickey Mouse forecasting", says Penn.
Penn reckons the market will grow 22% this year, but adds it could 'easily' be 30-40%.
The 22% growth forecast is based on quarterly figures of minus 1% in Q1, a flat Q2 +6% in Q3 and plus 2% in Q4.
A 31% overall annual growth would come from a quarterly scenario of +2, +4. +12, +4 giving annual growth of 31%.
So why does the SIA says 12%?
"You never see a trade organisation give a real forecast", said Penn explaining that trade organisations have to publish a consensus acceptable to their membership, and the membership will want that consensus figure kept low to avoid pressure from shareholders and financial analysts.
Next year, he reckons there'll be 28% growth, 2012 is expected to be up 18%, 2013 is expected to be up 3% and 2014 is expected to grow 12%.
The memory boys are going to have a bumper year.
"We're on-track for a $60bn memory market in 2010 and $20bn of that will be pure profit," said Penn.
What baffles Penn is that; "It doesn't matter what people are seeing, they just don't believe it. People say: Yes, but . . . . "
actually Malcolm said 2013 was 3% :-)
But yes provided the industry doesn't shoot itself in the foot, which is the one plus point of going fabless (aka fab-lite) provides in largely avoiding this, then there does seem to be good times ahead.
Well Mike I've just checked the piece and it says 3% for 2013