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Fearless IC forecasts for 2010

Posted: 06 Jan 2010 ?? ?Print Version ?Bookmark and Share

Keywords:IC forecast? foundry? NAND flash? microcontroller? solar?

2010 is just beginning to unfold in the electronics industry and there is already uncertainty in the air.

Looking into my crystal ball, I have released my own chip forecastsand other predictionsfor 2010. These are my top 25 predictions, which are strictly my opinions.

1. Double-digit growth?
Most forecasters see a big double-digit growth year in 2010. Unfortunately, I don't. My IC forecast for 2010: Plus 5 percent.

I see a small recovery, but I'm not as bullish as some. First, the worldwide economy still feels weak to me. It's better than last year. The economy is resilient in some nations and weak in others. I'm afraid the governments in some nations (i.e. China, Japan, United States) have propped up their respective economies with "crazed money" or what I call funny money. Stimulus packages, bail outs, cash for product programs (i.e. appliances, auto clunkers) have certainly jumpstarted some sectors, but will they have a lasting effect?

In some respects, I believe the bail outs and "cash for whatever" programs send the wrong message to consumers. Take the "cash for clunkers" programs in the U.S. or similar programs in China. Instead of buying a car when it makes sense, the government is providing false incentivesor bribes. Consumers may end up getting conditioned to buyif and only if the government bribes us to do so.

I'm also worried about lackluster consumer demand, the housing woes and unemployment, especially in the United States. Too bad. For once, there are some cool products in the market: iPhones and iPhone wannabes, cheap netbooks, e-book readers, snazzy LCD/LED TVs, etc.

2. Yet another fab tool downturn
Same old story. Another bad year for equipment makers. My semiconductor equipment forecast for 2010: Minus 10 percent.

I can barely remember a good year in semiconductor equipment. The business was booming when I started in high-tech journalism in the mid-1980s. In those days, chipmakers believed that "real men have fabs." Fabs were part of the equation in chip production. Equipment was also a valuable piece of the puzzle.

Those were the glory days in equipment. But those days are long gone. I also remember the fab tool boom during the "dot.com" explosion. I also remember the fab tool bust after the "dot.com" explosion and 2001 downturn.

Since then, it's been a struggle for fab tool vendors. 2009 was bad. Towards the end of last year, the signs did indeed improve. Intel, Hynix, Nanya, Samsung, TSMC and a few others bought gear.

I'm afraid the party is over. In 2010, there are no new fabs on the drawing board, according to SEMI. Repeat: No new fabs are expected to be built in 2010. That's just simply unbelievable. We will continue to see some technology and capacity buys, but without a new fab, the equipment industry may see another lousy and down year.

3. Will solar live up to its hype?
2010 forecast for solar: Minus 5 percent. The solar industry suffered its first-ever downturn in 2009. The recession put a damper on credit, which impacted the procurement of solar cells for businesses and homes. I'm told credit is still tight, especially in the United States. Solar still depends on attractive subsidies. That still concerns me.

But here's the real problem: In my opinion, the solar industry has failed to deliver on its promises. Efficiencies remain low. I see little evidence that grid parity is on the horizon. We were sold a bill of goods by some solar vendors. That doesn't mean solar is a flop. There are still opportunities for new and breakthrough solutions. I am still an optimist on solar, but let's cut down on the hype.


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