News Article
European forecaster predicts growth for 2008
European industry analyst, Future Horizon's expects double digit growth for the semiconductor industry as long as the global economy can hold together. The annual industry forecast seminar in London was told to expect 10% growth in unit and 12% growth in dollar terms, reversing the recent trend of units growing faster than price.
The health of the global economy remains the biggest potential block to a positive year for the semiconductor industry according to Malcolm Penn, CEO of Future Horizons. Despite the negative outlook coming from the USA, Penn no longer believes this is a useful benchmark for the rest of the world and feels the strength of emerging markets will bolster global growth. In fact China, India and Russia accounted for half of all global growth last year.
In his annual review Penn pointed out that many useful benchmarks of the past have changed and this is mainly due to the change in global economic dynamics. In fact there are a number of conditions that were expected to impact on the global economy and therefore the semiconductor industry but no longer appear to have the impact that it once did. These include the USA as a microcosm of global health, the expected stability in a presidential election time as well as the supposed bonus from an Olympics year.
Not only have these benchmarks changed but so has the internal cycles of the industry. In Penn suggested that if the price wars of the memory and logic makers were taken out of last year's equation then the market growth rate would have been closer to 12% instead of the 3.6% reported. This equated to a combined potential US$18 Billion in lost revenue. Penn suggested that sheer lack of revenue will put stop to the memory wars with the likely loss of at least one major player in 2008.
Penn maintains his optimism for the semiconductor industry and points out that unit growth has consistently grown year on year and the CAGR of the last five years has been a surprising 12.8% growth. Despite the fact that the last four years have been very poor. What a difference a year can make.
By exploring the growing breadth of applications the Future Horizons team were able to demonstrate that there are factors in each segment that impact on industry fortunes underlying the need for companies to continue to expand their product lines or risk being left behind as the technology consistently changes and evolves. This is no longer simply a cycle of the two years it takes for technology node changes but the increasing importance of market factors were a product that takes three years to develop may only have a shelf life of nine months.
In his annual review Penn pointed out that many useful benchmarks of the past have changed and this is mainly due to the change in global economic dynamics. In fact there are a number of conditions that were expected to impact on the global economy and therefore the semiconductor industry but no longer appear to have the impact that it once did. These include the USA as a microcosm of global health, the expected stability in a presidential election time as well as the supposed bonus from an Olympics year.
Not only have these benchmarks changed but so has the internal cycles of the industry. In Penn suggested that if the price wars of the memory and logic makers were taken out of last year's equation then the market growth rate would have been closer to 12% instead of the 3.6% reported. This equated to a combined potential US$18 Billion in lost revenue. Penn suggested that sheer lack of revenue will put stop to the memory wars with the likely loss of at least one major player in 2008.
Penn maintains his optimism for the semiconductor industry and points out that unit growth has consistently grown year on year and the CAGR of the last five years has been a surprising 12.8% growth. Despite the fact that the last four years have been very poor. What a difference a year can make.
By exploring the growing breadth of applications the Future Horizons team were able to demonstrate that there are factors in each segment that impact on industry fortunes underlying the need for companies to continue to expand their product lines or risk being left behind as the technology consistently changes and evolves. This is no longer simply a cycle of the two years it takes for technology node changes but the increasing importance of market factors were a product that takes three years to develop may only have a shelf life of nine months.
