Happy Days Are Here Again. Well, not quite. Maybe with apologies to Messrs Ager and Yellen writers of the popular 30s song, Less Gloomy Days might better catch the mood of the semiconductor market.
That was certainly the tune played at the Future Horizons' Mid-Term Semiconductor Industry Forecast Seminar in London last week.
Key points are that the market began its recovery faster than anticipated, and consequently the chasm of a 28 per cent downturn in 2009 has been reduced, according to Future Horizons forecast, to a still unnerving but less punishing 15 per cent.
Malcolm Penn (pictured), chief executive officer of Future Horizons is a semiconductor industry veteran, he probably bleeds silicon, and he has seen every semiconductor recession bar one, and yet even he has been surprised by recent events.
"The industry has shifted from meltdown in the fourth quarter of last year to stabilisation in the first quarter of this year to a rebound in the second quarter of 2009. Even for the chip industry dynamics, that is unprecedented," he told a rapt audience.
That is certainly one quarter earlier than Penn anticipated when he surveyed the market in January this year.
You can hardly blame him or any other market pundit. When Penn called his industry contacts for their thoughts on prospects earlier this year, responses ranged from "No Comment" to "We simply have no idea".
In retrospect Penn reckons some of the fourth quarter cutbacks can be seen as an overreaction. Sales of some consumer goods held up, yet inventories were being cut to the bone.
Those empty shelves have needed replenishment, and market revenues have bounced back accordingly. According to Penn, April was the strongest month in the semiconductor industry's history.
"This growth spurt should be over by the third quarter," says Penn, and he expects a typical seasonal and structural recovery to push third quarter growth to 12 per cent and fourth quarter growth to three per cent.
For 2010 Penn has revised his January forecast of 15 per cent growth to 19 per cent.
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