News Article
Future Horizons predicts double digit industry growth
The mid term forecast from the analyst company gives rise to a global double digit industry growth hope.
Malcolm Penn, chairman and CEO of Future Horizons, believes there will be some years of substantial growth ahead for the semiconductor industry. Penn suggests a range of possible results starting from 7% to a double digit percentage.
Due to the current apprehension to invest in semiconductor manufacturing equipment, Penn is certain that prices will continue to rise. This would trigger a growth reaching something below 20%. Penn points out that the pricing is good except for memory. The first five months the market is up 4.9% with a unit growth of 9.2%. Memory currently appears to continue to be the problem child of the industry.
Although the oil price went high and inflation pressures are a cause of concern, Penn notes that this is not a world recession. It is simply a global slowdown. Penn also notes that the second quarter sales were 2.3% above the first quarter where a flat second quarter was expected.
For the second half of 2008, Penn predicts a growth between 10 to 14 percent of quarter 3 over quarter 2. The consumer electronics chip industry makes the majority of its sales in this period. Soon after, in quarter 4, the growth would be between 3 and 6 percent.
Compared with the market in May 2007, the global chip market was up to 9.2 % in May 2008. The market in April 2008 was up 5.5% compared to the previous year. The US and Europe will struggle although there will be no dramatic impact on the global level. Whether China and India as well as other emerging markets can compensate the slow down period remains uncertain. Penn expresses concern about inflation, fuel prices, material prices and the food crisis.
However, the cyclic nature of this industry suggests this may be the best time to invest and be prepared for the very likely return of substantial growth, rather than suffer the missed opportunity and being left out in the cold and not able to provide full manufacturing capacities when needed. Chip capacity is at approximately 90% at the moment; so maybe is not the best idea to rely on foundries alone. Some fabless companies may even need go back to include manufacturing to keep up with the demand.
The short term outlook for the second half of 2008 will be plenty of upside potential, ASP and units, and providing that there is no global economic collapse, the substantial growth will continue. Look out for the radical changes in the chip industry's dynamic. Foundries may gain control if the tendency for CapEx under investment continues.
Due to the current apprehension to invest in semiconductor manufacturing equipment, Penn is certain that prices will continue to rise. This would trigger a growth reaching something below 20%. Penn points out that the pricing is good except for memory. The first five months the market is up 4.9% with a unit growth of 9.2%. Memory currently appears to continue to be the problem child of the industry.
Although the oil price went high and inflation pressures are a cause of concern, Penn notes that this is not a world recession. It is simply a global slowdown. Penn also notes that the second quarter sales were 2.3% above the first quarter where a flat second quarter was expected.
For the second half of 2008, Penn predicts a growth between 10 to 14 percent of quarter 3 over quarter 2. The consumer electronics chip industry makes the majority of its sales in this period. Soon after, in quarter 4, the growth would be between 3 and 6 percent.
Compared with the market in May 2007, the global chip market was up to 9.2 % in May 2008. The market in April 2008 was up 5.5% compared to the previous year. The US and Europe will struggle although there will be no dramatic impact on the global level. Whether China and India as well as other emerging markets can compensate the slow down period remains uncertain. Penn expresses concern about inflation, fuel prices, material prices and the food crisis.
However, the cyclic nature of this industry suggests this may be the best time to invest and be prepared for the very likely return of substantial growth, rather than suffer the missed opportunity and being left out in the cold and not able to provide full manufacturing capacities when needed. Chip capacity is at approximately 90% at the moment; so maybe is not the best idea to rely on foundries alone. Some fabless companies may even need go back to include manufacturing to keep up with the demand.
The short term outlook for the second half of 2008 will be plenty of upside potential, ASP and units, and providing that there is no global economic collapse, the substantial growth will continue. Look out for the radical changes in the chip industry's dynamic. Foundries may gain control if the tendency for CapEx under investment continues.
