July 29, 2011 — The global semiconductor industry will grow only 5% in 2011, not 10%, according to updated figures from IC Insights’ Mid-Year Update to The McClean Report. The 2011 IC market is being forecast down from 10% to 4%. A bright spot? The optoelectronics, sensors and discretes (OSD) market should remain at 10% growth.
IC Insights blames weak macro-economic conditions in H1 2011 for the downgraded forecast (see the table for specific economic "headwinds"). Quarterly worldwide economic growth slowed significantly in H1 2011 as compared to 2010, having an impact on electronics and semiconductor http://www.electroiq.com/semiconductors.html industries. The combined effect of the debt ceiling standoff in the US and European debt crises should lessen in H2 2011, IC Insights expects.
|Table. Economic conditions in 2011 and consequences. SOURCE: IC Insights 2011.|
|Unrest in the Middle East (Arab Spring)||Higher cost of oil|
|March 11 Japan earthquake and tsunami||Weak Japan IC market in Q2 2011 and supply chain disruptions across the electronics industry.|
|Natural disasters strike the US (tornados, floods, wildfires)||Disruptions in local economies; a hit to US GDP growth|
|European and US debt crises||High levels of consumer/business uncertainty|
Overall, the quarterly worldwide GDP growth figures have been on a fairly steep decline since reaching a very strong level of 4.6% in 2Q10. In fact, the 2Q11 worldwide GDP growth estimate of 3.1% is 33% lower as compared to the level registered one year earlier in 2Q10. Moreover, the 3.1% figure for 2Q11 is only 0.6 points above the global recession mark of 2.5% growth.
IC Insights expects 2H11 worldwide GDP growth to be better than H1. Japan’s GDP should be bolstered by post-earthquake investment and re-building efforts. Falling gasoline prices should boost the US economy, along with post-earthquake automotive boost, and increased capital spending under tax breaks. The brighter H2 should drive a moderately better H2 semiconductor market, as compared to the first half.
IC Insights’ 2011 Mid-Year Update is included as part of the new "Half-Year" subscription to The McClean Report and to full-year 2011 McClean Report subscribers. View http://www.icinsights.com/services/mcclean-report/ for more information.