“Every single duck is lined up for the industry to go into a prolonged market upturn,” said Malcolm Penn, CEO of Future Horizons.
The industry grew at 9.9% last year and ASPs have been rising for seven consecutive quarters and there have been twelve successive quarters of unit demand growth, said Penn.
“People don’t believe it,” said Penn, “it doesn’t fit with what they want to believe.”
One problem is that “too many people are talking the industry down,” said Penn instancing the SIA forecasting 3.4% industry growth in 2015 and 3.1% in 2016, “hardly a vote of confidence from the industry’s advocate,” commented Penn.
Other factors mandating the upswing are currently high fab utilisation rates, low levels of capex and negligible inventory builds. The auguries all point one way but the industry idn’t acting on them.
The ‘I want one more quarter syndrome’ is deeply embedded in peoples’ psyche, said Penn.
The macro indicators are also above the long-term trend. This week’s IMF GDP forecast is for 3.5% growth this year and 3.7% growth next year which are both ahead of long-term world GDP growth of 3.4%. In 2011-4 GDP growth was an above average 3.5%.
So the Future Horizons forecast for this year is for healthy 8.5% growth which will deliver an industry with $1 billion sales per day – $364 billion for the whole of this year.
If the 2014 recovery trend holds steady, however, the growth could hit15%, said Penn.