December 6, 2010 – Semiconductor industry executives polled by KPMG expect "solid increases" in sales and workforce growth — but they also think the industry will peak within the next 12 months, after a stellar 2010.
"Our findings show an industry that expects moderate growth next year, which is extraordinary in the context of an uneven global economic recovery," said Gary Matuszak, KPMG Global Chair for the Information, Communication and Entertainment practice, in a statement.
Historically, the semiconductor industry’s cyclicality has meant a whipsaw where boom years for semiconductor sales are followed by lousy ones. But the survey of 118 senior semiconductor execs (device, foundry, and fabless manufacturers), conducted with the SIA, finds that:
- 78% expect the industry to grow >5% in 2011. That’s not too far off from the 2009 survey, where 87% predicted the same thing for 2010. And 29% of respondents predict a >5% growth in workforce, better than the 23% in 2009 and 17% in 2008.
- 39% of execs see ≥10% sales growth in the next fiscal year (vs. 54% in 2009). Top growth drivers: wireless handsets and other wireless devices (68%), consumer products (65%), and computing (55%). 37% of respondents see >5% profit growth in 2011. A year ago that was 76%.
- Nevertheless, while execs are upbeat about sales and profits, they still show caution — 53% anticipate a cyclical peak in the next 12 months.
- 70% gave China the highest rating (8-10) as the most important region for semiconductor product growth, that’s down from 78% and 79% for 2009 and 2008, respectively. Seen playing a larger role over the next three years are the US (47%, vs. 42% in 2009) and Europe (30%, vs. 25% in 2009).
- 83% of execs believe semiconductor R&D spending will increase next year: 47% say >5%. (In 2009 it was 72% and 45%, respectively.)
- 62% indicate "high" or "extremely high" interest from customers for energy efficient/renewable energy products. That’s down slightly from 65% last year.
KPMG’s Semiconductor Industry Business Confidence Index, calculated from survey responses about revenue, capital spending, workforce change, and R&D spending, scored a 60 — just behind the 61 scored last year, and compared with a 36 in 2008. A score of 50 represents a neutral perception about the industry’s prospects.