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Analysts, vendors tip slow IC improvement

Posted: 11 Jun 2009 ?? ?Print Version ?Bookmark and Share

Keywords:IC recovery? semiconductor? market outlook? fabs?

Is the semiconductor business really improving or not? Right now, there appears to be marginal improvement in ICs, but it's still too early to see a full-blown chip recovery. Still, the signs are somewhat positive amid the downturn: Another market researcher has raised his IC forecast, while Diodes, Microchip, Mindspeed, Texas Instruments and others this week increased their respective outlooks. And the foundries are seeing robust growth in Q2.

All told, IC demand is improvingalbeit slowly. Independent semiconductor market statistician Mike Cowan has revised his 2009 semiconductor annual market estimate to $192.5 billion, which would be equivalent to a market contraction of 22.6 percent. In May, Cowan said the 2009 semiconductor annual market would hit $182.1 billion, which would be equivalent to a market contraction of 26.8 percent.

Cowan, who works with actual monthly global semiconductor sales numbers gathered and published by the World Semiconductor Trade Statistics organization, uses linear regression analysis of historical data to produce a forecast of worldwide semiconductor sales looking forward over the next five quarters.

Based on the data, there is good and bad news in store for the market. "With this month's momentum indicator moving into very high, positive territory bodes well relative to a possibly relative strong recovery in sales over the near-term," Cowan said.

"As mentioned last month this monthly indicator bears continued watching over the coming months in order to monitor the trend in this indicator possibly verifying that the present very positive trend is highly suggestive that a 'turning point' in the industry's near term sales is real and will be sustained," he said. "However, next month's (May 2009) predicted sales forecast estimate is projected to be $14.686 billion which would represent a year-over-year monthly sales growth of minus 27.5 percent not very encouraging relative to sustainability of a sales improvement trend if the model's May 09 sales forecast is born out."

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