Electronics Production | October 01, 2008
Part 3: IC Insights lowers 2008 IC market forecast by 3 points
The market researcher IC Insight has lowered their IC market forecast - in their September Update of the McClean Report - by 3 points. Part 3 of 4.
Quarterly “Seasonality” in the IC industry - 25-year Averages Just as the monthly IC market figures have a definitive pattern within a quarter, with the last month of the quarter being exceptionally strong, the sequential quarterly IC market growth rates during a calendar year also form a pattern (usually referred to as seasonality). The chart below depicts the average sequential quarterly IC market growth rates over the past 25 years (from 1984 through the first half of 2008). As shown above, when averaging the quarterly IC market growth rate figures over the past 25 years the 2Q, 3Q, and 4Q increases are all very similar (ranging from 4.0–5.3%). Interestingly, the average sequential growth rate during the first quarter of the past 25 years has been negative (-1.2%). As discussed below, the average growth rates by quarter over the last 25 years change dramatically when categorized into “good” and “poor” average growth years (i.e., using 10% as the breakpoint between good and poor years). In good years (e.g., 1984, 1986-1988, 1992-1995, 1999-2000, and 2003-2004), the second quarter of the year represented the highest sequential growth rate. This was somewhat of a surprise as the third quarter typically comes to mind first when thinking about the strongest seasonal quarter (as will be discussed later, the third quarter has become stronger over time). As shown, third and fourth quarter average growth rates slow from the second quarter peak but are usually still very healthy (even the first quarter sequential average growth rate of 3.1% in a good year is respectable). In poor growth years (e.g., 1985, 1989-1991, 1996-1998, 2001-2002, and 2005-2008), it appears that the first half of the year typically takes the brunt of the slowdown. As shown, the second half of the poor average growth year is usually rebounding from the first half IC market “correction.” IC Insights believes that the sequential quarterly IC market growth rate forecast for 3Q/08 (9%) will exceed the historical pattern for poor years shown above, as it did in the second quarter. However, as was shown earlier, the 4Q08 IC market is forecast to be flat with the third quarter, which is less that the 2.8% historical average growth during a poor year. Moreover, IC Insights believes that the bulk of the IC market slowdown during 2009 is likely to once again take place in the first half of the year with quarterly market improvement beginning in the second half of the year and carrying over into 2010. Changing Seasonal Patterns The next chart shows the 25-year history of 3Q/2Q sequential IC market growth. As shown, the trend line has been on an upward slope, indicating that the IC market is becoming increasingly dependent (i.e., seasonal) upon growth in the third quarter of the year. With the shift of electronic systems system sales from businesses to the consumer over the past 25 years, it makes sense that IC market seasonality is moving more toward the second half of the year and the third quarter in particular. It should be noted that the two biggest markets for ICs (i.e., PCs and cell phones) are both highly seasonal and now usually register noticeable second half of the year strength (a look at the cell phone market will be discussed later in this update). Moreover, when you add the strong consumer IC sales in the holiday season, the total IC market is likely to continue its recent pattern of strengthening third and fourth quarter seasonality. As shown above, IC Insights expects the 3Q/2Q 2008 IC market to increase 9%. If 2001 is excluded; the past 10-year average for 3Q/2Q IC market growth is 9%. Although this year’s 3Q growth rate it is not expected to match the record high 15% 3Q/2Q growth rate registered last year and in 2003, a 9% 3Q/2Q IC market growth rate is not bad. Direction Indicators The 1Q/4Q IC market direction indicator (chart below) was described in detail in the January-published As shown, not including the wild fluctuations after the steep downturn years of 1986 and 2001, the 1Q/4Q direction indicator has proven to have a good correlation with annual market growth trends. In fact, the -7% 1Q/4Q indicator in 2008 plots exactly with IC Insights’ revised 4% IC market growth forecast for this year (i.e., a similar 2008 1Q/4Q change with 2007 should yield an annual market growth rate near the 2007 figure). Does the increasingly seasonal 3Q/2Q change also serve as a good direction indicator for the annual IC market? From the plots in the below chart, it appears the answer is no! Chart Source: IC Insight
EUV photoresist company Inpria raises $31 million in funding Inpria, a pioneer in high-resolution metal oxide photoresists for extreme ultraviolet lithography (EUV), has secured USD 31 million in Series C funding from a broad syndicate including two of the biggest names within the semiconductor manufacturing space.
Semiconductor industry avoids direct impact of coronavirus The semiconductor industry appears to have escaped the direct impact of the coronavirus crisis so far, but the market is likely to suffer the repercussions as the outbreak slows or suspends production among electronics manufacturers, according to Omdia.
Plessey partners with Axus Technology Plessey, an embedded technologies developer, is partnering with Axus Technology (Axus), a provider of CMP, wafer thinning and wafer polishing surface-processing solutions for semiconductor applications, to bring high-performance GaN-on-Silicon monolithic microLED technology to the mass market.
GPV Electronics CN resumes production On 19 February 2020, the Chinese Central Government informed that all enterprises in the Guangdong province are now allowed to resume production.
Nano Dimension moves its main commercial activity to USA Nano Dimension announces that the company is establishing its headquarters for the Americas in South Florida.
Rockwell Automation inks deal for Italy’s ASEM Rockwell Automation Inc. has signed a purchase agreement to acquire digital automation technologies provider ASEM S.p.A.
IFR releases ‘Top Trends 2020 Robotics’ The International Federation of Robots (IFR) has forecasted an uptick of 2 million industrial factory robotic units in the next two years.
Paslin, Rivian fuel EV factory expansion The Paslin Company, a builder of robotic assembly lines for Tier 1 suppliers and OEM auto companies, is expanding in Warren, Michigan.
Nokia plans to acquire US-based company The Finnish telecom company is planning to acquire Elenion Technologies, a U.S.-based company focusing on silicon photonics technology.
neutec electronic to handle Asymtek and Dima in Switzerland Asymtek, a part of Nordson Electronics Solutions - announces that their distributor, neutec electronic AG, has expanded its representation of all Asymtek and DIMA products to the French-speaking areas of Switzerland.
BMZ subsidiary Poland reports successful business year 2019 BMZ Poland, the second largest production site of the BMZ Group, is expanding its production area and is reporting 10% sales growth and thereby reached record results for the business year 2019.
Scanfil CEO: ‘Our operations are making good progress’ The last quarter of 2019 was the strongest one for the EMS provider. Scanfil recorded a turnover of EUR 155 million, a growth of EUR 15 million or 10% year-over-year.
Prime Technological Services acquire ITS EMS provider Prime Technological Services LLC has acquired Georgia-based I Technical Services (ITS).
Florida’s Sypris snags BAE Systems contract Sypris Electronics LLC, a subsidiary of Sypris Solutions Inc., has won a contract award from London-based BAE Systems’ Electronic Systems sector.
Into the future, San Diego style IPC APEX EXPO, the North American electronics manufacturing industry’s biggest gig, has left the teenage years behind with this year’s 20th anniversary show held Feb 3-8 in San Diego.
5 semiconductor companies hold 53% of global wafer capacity The world’s top-five wafer capacity leaders each had capacity of more than 1,000,000 wafer starts per month, says IC Insights.
Global DRAM revenue holds steady in 4Q19 The DRAM inventory finally returned to a relatively normal level for most OEMs in 4Q19 after nearly three consecutive quarters of adjustments, says the DRAMeXchange research division of TrendForce.
Mitsubishi Electric completes new satellite production facility Mitsubishi Electric has completed construction of a new facility for the production of satellites at the company’s Kamakura Works in Kamakura, Japan.
ISS-Broadband delivered by Kongsberg Kongsberg equipment is to enable broadband transmission for the International Space Station (ISS) to 'significantly improve communication between the ESA astronauts manning the station and earth.
Mycronic receives order for an SLX mask writer Swedish equipment provider, Mycronic AB, has received an order for the new SLX mask writer from a customer in Asia. The customer already has mask writers from Mycronic.
A new production unit for mirror segments for ELT Safran's new production unit at the company's Saint-Benoît facility near Poitiers in central France will make the primary mirror segments for Europe's Extremely Large Telescope (ELT).
A more sustainable approach to semiconductor manufacturing Reuse; that is the key to driving environmental sustainability in global semiconductor manufacturing, says Steven Zhou, CEO of Moov Technologies.Load more news