Memory will drive the accelerated growth rate. NAND flash is forecast to grow at a CAGR of 16.6% until 2016, and DRAM is expected to grow 9.6% CAGR till 2016.
The NAND and DRAM growth rates are enough by themselves to double the CAGR for 2011-16 compared to the CAGR for 2006-11.
Especially good news for the industry is that the growth will largely be driven by increasing ASPs.
“The outcome is expected tp be steadily upward-trending ASPsthrough 2016, compared to the 3% annual decline that ASPs averaged between 2006 and 2011,” says IC Insights.
Since Moore’s Law mandates a halving of cost every 18 months, a rising price means high profitability for the semiconductor companies.
Moreover, points out IC Insights, there’s little chance of the spectre of over-capacity spoiling the party.
For this year, the most optimistic forecaster is Semico with a 6-8% growth forecast.
IDC is forecasting 4.6%; IHS expects 4.3%; while Gartner and Future Horizons plump for 4% and IC Insights goes for 3%.
The SIA is forecasting a flat year which, according to Malcolm Penn, CEO of Future Horizons, is “totally and absolutely wrong, it’s not going to be less than 4%.”
It is assumed that SIA forecasts are low because its members want them low to make their own company numbers look better.
Penn expects Q3 to be up 10% which is above the high side of most corporate guidance.
Companies’ own growth forecasts are absurd with such wide spreads that they are meaningless.
Intel is forecasting 2 to 10% growth; Qualcomm -4 to +5%; TI -4 to +4%; ST -5 to +5.5%; SanDisk 11 to 21%; MediaTek 13 to 18%; Broadcom 1 to 9%; Freescale -7 to +2%; PMC-Sierra at -6 to 0%; Triquint 10 to 15%; Maxim at 0 to +5%; Altera 2 to 6%.
These forecasts are so wide that their only usefulness is in obscuring what is going on the market.
Last February Intel stopped supplying sales data to the WSTS. Last year AMD left the WSTS.
Without them, and other companies likely to follow estimates of semiconductor market size and estimates of product markets will be guesswork.
Does that matter?
“No one will have any visibility into other peoples’ markets,” replies Penn, “everyone will be flying blind – like they did 20/30 years ago. That’s why they started WSTS in the first place.”