It’s All Up To The Wireless Consumer
Last week was a bad one. The US reeled from its sovereign debt deal; Europe reeled from its attempts at sovereign debt deals. Those CEOs reporting alluded to macroeconomic uncertainties as they made their Q3 forecasts.
Gloomiest of all was SMIC’s new CEO, Tzu-Yin Chiu, who shaved a fifth off his billion dollar capex budget blaming: “The severe macroeconomic conditions out there” and stating “we are preparing for a long industry downturn.”
He blamed falling confidence among China OEMs.
However Qualcomm’s CFO Bill Keitel, while conceding that “there’s a pretty good correlation between GDP growth and consumer electronics,” asserted that the wireless industry bucks that trend because the world always wants more data capability.
Nvidia reported 37% Q2 y-o-y growth in its consumer IC business where its Tegra chip is positioned.
And with wireless IC sales set to overtake computer IC sales this year for the first time, according to iSuppli, wireless sales could keep the semiconductor industry from decline.
Outside consumer, the signs are worse. IT spend closely tracks GDP growth and, with GDP expectations being trimmed worldwide, nervous managements aren’t going to sign off on a lot of IT spending.
So it’s up to the wireless consumer. C’mon iPhone 5, you can save us.