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ICs can count on good times ahead

Posted: 04 Mar 2010 ?? ?Print Version ?Bookmark and Share

Keywords:IC industry? market rebound? semiconductor?

"Believe it or not, the good times are here!" This is the message delivered by Jim Feldhan, president of Semico Research Corp., who predicts a two-year growth cycle for ICs.

Semico also raised its IC forecast. The IC market is expected to jump 24 percent in 2010 and grow by another 11.5 percent in 2011, according to Feldhan. Semiconductor revenue slipped to $223 billion in 2009, a 10.2 percent decrease compared to 2008.

In January, Semico predicted that the IC market would fall by 8 to 9 percent in 2009, but the sector would grow by 22 percent in 2010.

In other words, the downturn is over and the IC industry is back on track. "Technically, the recession ended in Q3 09," Feldhan said, adding that world GDP is expected to jump 5 percent in 2010.

There are other good signs. IC demand has rebounded. Fab capacity utilization is expected to be 90 percent plus by year's end. And capital expenditures continue be behind the growth curve, he said.

What will drive IC growth for this year and next? According to Feldhan, here are the top six reasons:

??Past conservative capex and plant closures have tightened capacity;
??Increasing demand creating capacity shortages;
??Aggregate ASP increases due to mix changes and tight supply;
??End products have richer semiconductor content;
??"Smart" inventory magnifies demand;
??Consumer continues to spend especially on electronics;
??Government spending will continue to stimulate economy.

According to Semico, here are the top 10 markets in terms of semiconductor revenue:

??Notebook PCs
??Desktop PCs
??Mid-range/high-end servers
??Mid-range cellphones
??High-end cellphones
??Video game consoles
??Entry-level servers
??DVD video recorders
??Digital cameras

- Mark LaPedus
EE Times

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