Semiconductor market to plunge 28% in 2009, says analyst
This year, the world semiconductor market will fall by 28% in value and by 26% in unit shipments, according to Future Horizons at the company’s International Forecast Seminar 2009 (IFS2009) in London this morning.
The company’s forecast is by far the gloomiest of all the major analysts. Merrill Lynch’s 24% cent decline forecast is the next gloomiest, with Citigroup, JP Morgan, Inside Chips, Broadpoint, AmTech and Gartner Dataquest coming along behind with forecasts of 20% decline, and with Goldman Sachs and Wachovia forecasting 15% decline.
The 22.5% fall in the market in Q408 will be followed by a 20% fall in Q109, said Future Horizons.
“The speed of collapse in Q4 was unprecedented”, said Malcolm Penn, CEO of Future Horizons.
Because of the speed of the decline, the hope is that the forecasts will overshoot. But no one knows. “No one knows where the bottom is. No one knows what’s going to happen”, said Penn.
“Texas Instruments says its growth in Q1 will be from minus 5% to minus 30%. That means they haven’t got a clue what’s happening to their business”, said Penn, “Q2 will be the worst. Q209 could be minus 40% compared to Q208. Some people say minus 50%.”
In Q4 there was a crash in unit demand which will lead to over-capacity, though Future Horizons doesn’t see over-capacity becoming a problem. It beleivesthat capacity could get tight in the second half of 2010.
2008 ended up as a year in which market value declined by 2.4% while units grew by 4%. The first half of 08 was good, Q3 was robust, but Q4 showed a collapse.
The only chance of any ASP increase this year is in memories. “There’s little chance of ASP increase in 2009 other than in memory”, said Penn, “simply because they’re losing so much money it can’t continue.”
The good news is that the industry is entering the recession in good shape with no sign of over-capacity. The industry started to cut back on capacity expansion a year before the recession hit.
The foundry industry was lucky in that it cut back on capex to push up wafer prices, then warned the industry that prices would not decline so fast over a process node as they had done. Then, of course, came the credit crunch with demand falling off a cliff. So the foundries were lucky. Now there’s no more talk from them about prices staying stable, according to Penn, now they want orders to fill their foundries.
Post-2009, the Future Horizons forecast is for rapid growth: a 15% rise in 2010; a 28% increase in 2011; an 18 per cent improvement in 2012 slowing to 3% growth in 2013. “2014 is the start of the next cyclical recovery”, said Penn.
The best that could be said about this year was: “It’s very severe but it’s not 2001”, said Penn, “the markets are global and are twice as big as they were in 2000.”Tags: economic downturn, semiconductors