Make no mistake, market could rise by 15% this year

Europe’s component distributors have made a surprisingly good start to the year. First quarter billings increased by 20%, when compared to the previous quarter and by 26% compared to the same period in the previous year.

But should we be that surprised?

We know that demand for electronic components has been steadily rising for more that a year such the 2009 crisis and suppliers have been struggling to match production capacity to rising demand.

Add to that the as yet unquantifiable effects of the Japan earthquake on chip fab capacity shortfalls and you have a recipe for tight supply and rising prices.

Earlier this month market watcher IC Insights confidently predicted semiconductor market growth of at least 10% this year and possibly as much as 15%, after seeing the Q1 numbers. 

According to the analysis: “Currently, there are a number of good signs regarding the economy that should help the IC market continue to grow at a good pace throughout 2011″

But before we get too carried away with talk of a 15% year, IDEA’s chairman Adam Fletcher, adds a note of healthy realism.

“The important Book to Bill ratio has now dropped back to unity suggesting that billings growth in Q2’11 and throughout 2011 will now slow,” said Fletcher.

“The true impact of the Japanese disaster will not become fully apparent until the end of Q2’11, but although some components are on an extended lead-time it’s currently business as normal for the vast majority of European customers,” he added.

It is understandable for Adam Fletcher to warn against complacency by pointing out that there are inevitable uncertainties in the market, which could come into to play later in the year.

But like everyone else I just hope that the figures for 201 turn out to be better than everyone was predicting just a few months ago.

My guess is we will all be pleasantly surprised.

Related Tech News

Share your knowledge - Leave a comment