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Forecasts Assume Semiconductor Recovery Has Begun
The latest semiconductor market forecasts from World Semiconductor Trade Statistics (WSTS) and the Semiconductor Industry Association (SIA) call for a 21% to 22% decline in 2009 from 2008. If true, 2009 would be the second worst year in history after a 32% decline in 2001. A 22% decline in 2009 would require average quarter-to-quarter growth of 6% in 2Q 2009 through 4Q 2009 following steep declines of 24% in 4Q 2008 and 16% in 1Q 2009. The latest evidence tends to support the resumption of growth in 2nd quarter 2009. IC Insights estimates 5% growth in 2Q 2009 from 1Q 2009 based on company guidance: IC insights estimates. The Semiconductor Industry Association’s (SIA) April three-month-average semiconductor market data shows a 6.4% increase from March, another indicator of solid 2Q 2009 growth: SIA April Data.
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World Semiconductor Market Forecasts: Annual Change |
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| Source |
Date |
2009 |
2010 |
2011 |
| Databeans |
April-09 |
-17% |
17% |
12% |
| WSTS |
June-09 |
-21.6% |
7.3% |
8.9% |
| SIA |
June-09 |
-21.3% |
6.5% |
6.5% |
Assuming a 22% decline in 2009, the recent forecasts from WSTS and SIA appear too conservative for 2010 and 2011. Even a modest 2% average quarter-to-quarter growth rate in 2010 would drive 15% annual growth. Previous double-digit annual declines have been followed by double-digit increases in the following year or the year after. Databeans’ forecast of 17% growth in 2010 and 12% in 2001 appears to be more likely.
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Semiconductor Market Double-digit Declines & Recoveries |
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|
1985: -17% |
1986: 23% |
1987: 23% |
1988: 23% |
|
2001: -32% |
2002: 3% |
2003: 16% |
2004: 28% |
Record Declines in SC CapEx May Lead to Undercapacity
SC Manufacturing Eqpt. vs. Year Ago (SEMI, SEAJ)
The semiconductor industry may see record declines in capital expenditures and spending on manufacturing equipment. Combined data on semiconductor manufacturing equipment shipments from SEMI (North America based vendors) and SEAJ (Japan based vendors) shows April 2009 three-month-average shipments down 70% from a year ago. The three-month-average book-to-bill ratio was 0.54 in April 2009, indicating shipments will continue on a downward trend for at least the next few months. Total semiconductor manufacturing equipment shipments will be down at least 60% in 2009 from 2008. This 60% decline in manufacturing equipment shipments should translate into at least a 50% decline in total semiconductor industry capital expenditures in 2009 – the largest decline in at least 15 years.
Semiconductor market forecasts generally assume a recovery has begun in second quarter 2009, with a moderate recovery continuing in 2010. Semiconductor manufacturers will be cautious about buying manufacturing equipment until the recovery is certain, probably 1st quarter 2010 at the earliest. The lag between shipments of manufacturing equipment and increases in wafer fab capacity could result in undercapacity and shortages of some key products in 2010.
Semiconductor Market Analysis and Intelligence
SemiconductorIntelligence.com is the website of Semiconductor Intelligence, LLC – a consulting company for semiconductor market analysis, business intelligence and competitive intelligence. The principal of Semiconductor Intelligence is Bill Jewell, who has 23 years of experience in semiconductor market analysis