[International] Reading the tea leaves in a changing semi market


That frantic rustling you've been hearing over the past few weeks is the sound of semiconductor industry market watchers scrambling to adjust their forecasts to cold economic realities.


Market research firms were generally expecting 2011 to be a year of 5 to 10 percent  growth for the semiconductor industry, coming on the heels of a 2010 that saw the chip industry bounce back from recession to grow by more than 30 percent. But concerns about the global macro economy and sluggish PC demand have prompted most of them to trim their outlooks; most now see low single-digit growth or, in some cases, contraction for the year.


Veteran chip market analyst Mike Cowan put together this chart, which shows the latest forecasts from several sources. Cowan's chart leaves out some firms, including Semico Research Corp., which  early this month cut its 2011 chip market forecast for the year to negative 2 percent from an earlier forecast that called for 6 percent growth.


Cowan notes that the three of the five latest forecasts show pretty strong agreement of a 2011 market of between $313.2 billion and $313.4 billion, with Gartner offering a lowball $299 billion and IC Insights a high of $328 billon.


According to Cowan, the soon to be released August sales numbers from the World Semiconductor Trade Statistics (WSTS) organization will be pivotal in pointing directionally to where the 2011 sales growth forecast estimate, as seen by his Cowan LRA model, will end up.


Depending on the WSTS numbers for August, expected to be released next week, Cowan's model forecasts that chip sales will grow between 2.6 percent and 5.7 percent this year, reaching between $306 billion and $315.4 billion. Cowan's current forecast calls for the chip market to grow 8.4 percent in 2012 to reach $339.4 billion.


Cowan said he will generate his newest forecast immediately after the WSTS numbers are released, which is expected to happen on Wednesday.


Source: EETimes