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Future Horizons: IC industry gets this in order

Posted: 07 Nov 2005 ?? ?Print Version ?Bookmark and Share

Keywords:future horizons? ic industry? semiconductor industry?

European analyst group Future Horizons see the global semiconductor industry having set things in order and expects growth in 2006 to depend largely on the strength of the global economy. This is based on three industry variables that Future Horizons says are now unusually aligned: paring off of excess inventory levels, rising capacity utilization and moderate new capacity investments.

Future Horizons also predicts that if the global economy remains strong in 2006, the semiconductor industry could experience growth of as much as 20 percent. The International Monetary Fund (IMF) predicts that the world economy will experience 4.3 percent GDP growth next year.

"A 4.3 per cent world GDP growth is a very big if, given the inevitable slow down in consumer spending, but then it is the consumer that has been driving growth since the 2001 crash and we are thus not mentally able to believe business will finally pick up spending again," said Malcolm Penn, CEO, Future Horizons in a statement.

"The IMF clearly believes that business has the capacity to do this, and that the transition will be smooth. If this is the case, the chip market will boom. We have seen a semiconductor market correction in 2005 from which the industry can bounce back fast if the economy remains strong," added Penn.

However, a slow global economy of between 3.0 to 4.0 percent in 2006 would reduce the growth of the semiconductor market to single digits, according to The Future Horizons Semiconductor Update Report Special Supplement.

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