Semiconductors weak through 2012, Semico predicts

June 22, 2011 — Semico expects H2 2011 and early 2012 to bring a weak semiconductor market, as the Semico inflection point indicator (IPI) has been steadily declining since May 2010. In August 2010, the Semico inflection point indicator (IPI) index experienced its first drop since December 2009.

The IPI provides accurate and proven forward-looking predictions on the direction and strength of the semiconductor market twelve months in the future. Inventory concerns, price declines, and broader economic indicators herald a semiconductor industry cutback, though Semico predicts it won’t last long.

Excess buildout in tablets, PCs and smartphones generate inventory concerns. Prices in some semiconductor categories have declined over the last two months, hurting revenue, although unit demand has remained healthy, Semico points out.

While semiconductor sales have bucked macroeconomic trends in the past, Semico expects the economy to have more influence on semiconductors now that electronics are so pervasive.

Semico’s Jim Feldhan discussed the IPI with senior technical editor Debra Vogler earlier this year. See his analysis here.

In the last 2 months, Semico’s IPI has shown an uptick, hinting that the slowdown will not last long. Semico is cautiously optimistic about H2 2012’s outlook; though two months of data does not guarantee a trend, additional factors are supporting this optimism.

The Semico IPI report is published monthly and includes the IPI as well an analysis of the data. Semico’s worldwide semiconductor forecast is published in the IPI report once each quarter. The other two months include excerpts from recently completed Semico studies. The June issue will contain Semico’s midyear forecast.

Semico is a semiconductor marketing & consulting research company. To buy the June IPI Report as a single issue, or sign up for the entire year, contact Susan Cadel (Eastern US and International) [email protected] or Sam Caldwell (Western US) [email protected].

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