WSTS forecast update: Two more tough years

01/01/2012

The WSTS' newest version of its twice-a-year semiconductor industry outlook shows some softer segments than just six months ago in its midsummer update. With 2011 results all but official (as of early December), WSTS joins other industry watchers who've adjusted their totals to somewhere between 1%-2% total chip sales growth (vs. 5+% expectations earlier in the year). Technically the industry is poised to set records exceeding $300B in sales, but what will be remembered is a year of macroeconomic sluggishness (both worldwide and regionally, e.g. the ongoing European debt crisis), declining confidence in consumer and corporate sectors, and significant supply chain disruptions highlighted by disasters in Japan (March 11 quake/tsunami) and Thailand (massive flooding).

By product segment, memory takes the biggest hit in the WSTS' updated forecasts, which shave -10% off earlier 2011 sales projections ($60.7B, -13% Y/Y vs. -3%) and -15% from 2012 numbers ($57.8B, -4% vs. +1%); DRAM oversupplies have put a big hurt on revenues. Only two segments get an upgrade in the WSTS' new outlook: discretes and opto got bumped up ~2% each in 2011.

The WSTS' once-projected uptick in 2012 chip sales won't be materializing either, with sales growth expectations lowered to around 2% instead of 7+%. Most individual sector growth estimates that were in the high single-digits or even low-teens are all at mid-single-digits. That's an -8% overall haircut from the midyear forecast, and -10% or more to ICs, analog, MCU, and memory.

A regional look at the WSTS numbers also shows across-the-board downgrades from the midyear estimates. Leading the way down is a much gloomier outlook for Europe, which thanks to the aforementioned economic instability has been slashed to zero growth in 2011 (vs. 8% at midyear). Changes in 2012's outlooks are also harsh, with big cutbacks for the Americas (1% vs. 8%) Europe (-2% vs. 10%), and Asia-Pacific (3% vs. 6%). Even Japan's recovery is slowing down; the WSTS now expects 5% growth in 2012, not the 10% it foresaw back in June. ??? J.M.

Solid State Technology, Volume 55, Issue 1, January 2012

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