By Debra Vogler, senior technical editor
February 7, 2011 — Jim Feldhan, president of Semico Research, discusses the role that emerging economies play in driving the semiconductor industry and the economic indicators that point to some good news for the semiconductor industry. Feldhan was a presenter at SEMI’s Industry Strategy Symposium (ISS; 1/9-11/12, Half Moon Bay, CA). He speaks here with Debra Vogler, senior technical editor.
Semico’s inflection point indicator (IPI) has been on a downward slope since it peaked in May 2010 (Fig. 1). This is an indication that the semiconductor industry will peak mid-year in 2011, and then the industry should start seeing declining revenues for the second half of 2011, observed Feldhan.
Figure 1. Semico’s IPI. SOURCE: Semico Research
U.S. Department of Commerce data on after-tax corporate profits as a percent of national income (Fig. 2) — corporate profits are at record levels — are a good sign, said Feldhan. The good news coming out of this data points to increased investment in innovation and innovative products in the next year or two. Corporate cash levels are very high, noted Feldhan, "it’s now time to do something with that cash," and we think this will be very good for the semiconductor industry."
|After-tax corporate profits as a percent of national income →|
Figure 2. A history of profits. SOURCES: U.S. Dept. of Commerce, BEA