Recovery just weeks away!
27 April 2009
If you like stats then I think the graph below is an interesting one. It gives the growth figures for the semiconductor industry since time began (in a semiconductor sense anyway).
Ignoring the huge lump in the growth curve in the 50s, when any increase from a low starting point still represented high proportional growth, the most striking aspect is that the semiconductor industry is never dull.
I have picked up on this particular survey for two reasons. One is that IC sales are a pretty good indicator of the state of current business – it doesn’t have the inherent lag that retail figures or manufacturing equipment sales have. The other reason is that it appears to predict that the recovery may start as early as the second part of this year. So with only nine weeks to go of the recession we should be safely able to say that we have ‘bottomed-out’! Or maybe it doesn’t pay to take these things too literally or on too much trust.
Nonetheless, while a predicted market reduction of 28% sounds devastating, a look at the graph reveals that the wild fluctuations in the market are such that it is unlikely to take even a couple of years to correct the loss. Or to take the more optimistic standpoint, it is only the equivalent to a correction of the last three years of growth. There you go – we are now not losing at all, just not winning by as much as we were!
Of course I don’t believe that we can get the flags out to rejoice at the end of the recession on the first day of July, nor do I believe that a 28% slump in turnover is anything other than desperate news for many in the industry. What is obvious from the graph though is that years of negative growth are isolated. Until 2008, when the last few months dragged the whole of the year into a position of marginal negative growth, obviously followed by a dire 2009, there has never been consecutive years of recession in the semiconductor industry. Recessions in electronics last for a year and then the drive for innovation and the positive bounce-back from a period of de-stocking mean that recessions stay short and sharp, rather than dragging on for years.
There has been plenty of anecdotal evidence that parts of the industry are starting to ramp up again, or indeed that they never ‘ramped-down’ to any significant extent in the first place. If this notion of recovery is backed by analysis of growth trends for the last sixty years, maybe we should start believing what is staring us in the face, rather than allowing ourselves to be caught up in this self-perpetuating gloom-fest.
More details about the report can be found on the Future Horizons web site.
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