Global semiconductor industry to grow 7.9 percent in 2013

January 28, 2013

Malcolm Penn

Malcolm Penn

According to Malcolm Penn, CEO, Future Horizons, the outlook for the global semiconductor industry in 2013 is likely to be +7.9 percent. This means, the global semiconductor industry will likely grow to $315.4 billion in 2013.

Should this happen, it would be significant, given that this is the third year in a row that the market failed to break the $300 billion barrier! The global semiconductor clocked around $292.3 billion in 2012, as against $299.5 billion In 2011.

I asked Malcolm Penn the rationale behind this. He said, the rationale is exactly the same as that for 2012. There is said to be no change to last year’s fundamental market analyses. That’s not all! There are likely to be exactly the same (economic) downside risks as well.

The unit demand, capacity and ASPs are all ‘positively aligned’. Here, it is advised that one should never underestimate the economy’s capacity to derail the chip market. Even the downside forecast has been to break the $300 billion barrier.

The global chip industry growth is driven by four factors. These are economy, which is on hold due to complete loss of confidence, unit demand, which is back on the 10 percent per annum treadmill (inventory gone), fab capacity, which is currently tight (very), especially at the leading technology edge, and ASPs, which are structurally following the usual ups and downs.

There is a very safe, long-term bet, provided companies execute properly. As it is, most firms don’t, as they are too pre-occupied with chasing short-term targets.

Finally, if the year 2013 does show a recovery, the global semiconductor market will likely go ballistic in 2014.

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  1. Mike Cowan
    January 28, 2013 at 1:24 pm

    Hi Pradeep – the most recent run of the Cowan LRA foreasting model (based on the WSTS’s November HBR sales numbers published on Jan 7th, 2013) put out the following sales and yr-o-yr sales growth numbers for 2012 and 2013: $292.992 billion (-2.2 percent) and $309.244 billion (+5.5 percent), respectively. Therefore, the Cowan LRA Model’s sales growth expectation for 2013 is 2.4 percentage points lower than Malcolm Penn’s forecast of 7.9 percent.

    Note that the WSTS will publish the final (actual) global semiconductor sales result for 2012 sometime during the first week in February. Therefore, stay tuned for my next forecast numbers following their posting of the December HBR (Historical Billings Report).

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