20 July 2007
Ball of confusion
Nobody is sure where semiconductors sales are headed. But why? By Graham Pitcher.
If you’re looking for the quiet life, then getting involved in tracking the semiconductor market is probably something you should avoid. Ever since the mid 1960s, the industry has been on what could be described as a ‘white knuckle ride’, with revenues soaring or slumping as the industry entered or exited its latest crisis.
According to the Semiconductor Industry Association (SIA), cycles typically included two years of 20% growth, a year of slow growth and a year where revenues declined. Over the 25 years from 1975 to 2000, semiconductor revenues showed a compound annual growth rate of 16.1%, driven by technological advances and the increasing pervasiveness of electronics.
The most recent – and in all probability, worst – crisis came in 2001 with the bursting of the dot com bubble. Since then, a degree of sanity seems to have prevailed, underpinned by what appears to be a conscious decision to avoid the knee jerk capital investment mistakes of yesteryear.
The consequence is the semiconductor sector is appearing to be more mature than it was in the 1980s and 1990s. Mature industries have slower growth, so it is no surprise to see annual sales revenues growing at single digit rates rather than the 30% a year increases of earlier times.
But semiconductor revenues get industry observers excited. And the topic of the moment is which way are the sales figures headed?
Author
Graham Pitcher
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