02 June 2010
Heroes or zeroes?
The 'noughties' – the first decade of the Millennium – has been called a lost decade for the semiconductor industry, with effectively zero growth. But things are about to change, if you subscribe to the bullish outlook of Future Horizon's chairman Malcolm Penn. Here are his predictions for semiconductor revenue growth in the next few years.
2010: +31%, with still some scope for upwards revision
2011: +28%, based on the industry being at the peak of the structural cyclical boom
2012: +18%, based on the normal 'trash cycle'
2013: +3%, based on a market correction in full flow (could be negative, however)
2014: +12%, based on start of the next cyclical recovery.
How long will the good times last? The semiconductor industry has a history of shooting itself in the foot and, in the past, boom has inevitably been followed by bust as companies throw cash at capacity, creating oversupply and inevitable declines in revenue. It's the one industry that continues to defy the generally accepted rules of economics.
Could the industry go back to its old ways, or has the 'old dog' actually learned a new trick? Time will tell, but Penn's use of the phrase 'trash cycle' implies that you shouldn't hold your breath.
Author
Graham Pitcher
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