There was little solace to be found at Future Horizons' Semiconductor Industry Forecast seminar in London. In fact it's a wonder delegates didn't wander out of the hotel and throw themselves under the Kensington High Street bound buses!
To cut to the chase Future Horizons CEO Malcolm Penn (pictured) is forecasting a 28 per cent decline in global semiconductor market value in 2009 and a 26 per cent decline in unit shipments.
It is by some distance the most pessimistic forecast so far. Merrill Lynch comes next in the woe is me stakes with a 25 per cent decline. It has to be said that the World Semiconductor Trade Statistics forecast for a two per cent decline looks wildly optimistic and that's being charitable.
Penn bases his pessimism on the evidence of a ghastly fourth quarter in 2008.
"A 22.5 per cent decline is the worst fourth quarter ever recorded," said Penn whose longevity in the business has seen him survive all previous chip recessions bar one. "Business stopped dead. It is unique and remarkable," he added.
Penn is honest enough to comment even this forecast could be out, given the uncertainty around the global economy. With rose tinted glasses in place he can see a 17 per cent decline in 2009. He is not betting the farm on it. The same goes for the industry, where revenue forecasts have ranged from minus 20 per cent to minus 50 per cent.
"Nobody knows where the bottom is, " said Penn.
"Texas Instruments says its growth in the first quarter will range from minus five per cent to minus 30 per cent," he commented.
Penn reckons the first quarter this year will see a 20 per cent decline on the fourth quarter last year.
Those two big negative quarters should be the worst of it, with the uncertainty settling down, the second quarter will see a two per cent uptick on the first quarter. A typical seasonal and structural recovery will then see sequential growth of 12 per cent in Q3 and three per cent in Q4.
Penn predicts the recovery will continue with 15 per cent growth in 2010 - "could be more," he interjects - and a bonanza 28 per cent upturn in 2011.
Good information.
Posted by: Market Intelligence | October 29, 2009 at 01:04 PM