[International] Analyst: Chip market downturn to be brief

 

SEOUL, South Korea—A semiconductor industry downturn that began over the summer will be short lived, reaching its bottom in February 2012, according to a market analyst.

 

Speaking at Dongbu HiTek Co. Ltd.'s Analog Semiconductor Leaders Forum here last week, Jim Feldhan, president of Semico Research Corp., said the semiconductor industry supply chain pulled back and started burning inventory amid deteriorating macroeconomic conditions and declining consumer spending.

 

Feldhan said nervous OEMs are likely to continue burning inventory through the end of 2011 and into 2012. He predicted that the market would overreact to the slowdown in business, projecting that overall industry capacity utilization would slip to under 80 percent by the end of the year, down from more than 90 percent at the beginning of 2011.


Feldhan said the inventory burn would ultimately make the downturn shorter than it might have been otherwise. Feldhan said Semico's Inflection Point Indicator economic model projects that the current downturn will bottom out roughly in February 2012, making the downturn last about three quarters total.

 

"Our expectation is that we are going to see the downturn bottom out early to mid next year," Feldhan said.

 

Last month, Semico cut its forecast for the 2011 semiconductor market, saying it expects the market to decline by 1.4 percent in 2011 after early predicting a 6 percent increase. The firm projects that the chip market will rebound with 8 percent growth in 2012.

 

"We see no short terms catalyst to really change the direction of the semiconductor market in the next several months," Feldhan said.

 

Source: EETimes

 

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