IC Insights updates semi forecast, discusses China’s stimulus success

September 20, 2011 – Bill McClean, president of IC Insights, issued his fall forecast update in Sunnyvale, CA (9/15). He expects electronic system sales (in US dollars) to grow by 6% in 2011 and 7% in 2012. He also projects that a slightly above average 2012 worldwide GDP growth should drive a 10% growth in the IC market. Long-term, McClean believes the 9%-10% CAGR for IC unit shipments will remain intact. Additionally, ASPs are forecast to stabilize in the long term, leading to IC market CAGRs of 8%-9%. Figures 1 and 2 provide details of the IC unit volume shipment trend and the various IC market growth rate scenarios, respectively. McClean forecasts the US GDP growth in 2H11 to increase by 2.7%; for 2012, 2.8% growth is expected. Long-term, the US GDP is expected to grow by 3%-3.5%.

Figure 1: 2000-2011 quarterly IC unit volume shipment trends. (Source: WSTS, IC Insights)

Figure 2: Quarterly 2011 IC market ($) growth rate scenarios. (Source: IC Insights)

In an interview with SST, McClean discussed the impact that the stimulus funding provided by various world governments has had on worldwide GDP growth vs. what that growth might have been if stimulus funding had not taken place (Figure 3).

From 2009 through early 2011, about $2T was put into the world economy, but the withdrawal of stimulus funding and even some governments implementing austerity programs, has resulted in a shaky economy, impacting worldwide GDP growth. "The stimulus helped us get through that period…going forward, the worldwide economy will stabilize, but right now, there are a lot of issues that make it uncertain," said McClean.

Figure 3: 2006-2011F worldwide GDP growth with and without stimulus. (Source: IC Insights)

McClean pointed out that China was one of the first countries to implement stimulus funding, beginning in late 2008. As a result, that country’s economy grew in 2009 and has come through the downturn, picking up steam in 2010, he said. China is the largest consumer of PCs, cell phones, autos, and digital TVs, which is of great importance to the semiconductor industry because of the semiconductor content in those products.

Projecting even further ahead, McClean projects soft single-digit growth for the industry in 2013 because most of the stimulus or other measures that might still be in place in 2012 (an election year in the US) will be taken out of the equation by 2013.

For more forecast details, listen to the podcast interview, which includes McClean discussing how unique events are causing an atypical recovery.


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