SAN FRANCISCO—The second half of 2009 will bring welcome relief to the semiconductor and capital equipment industries, according to market research firm IC Insights Inc., which is predicting strong seasonal strength for electronic system sales, worldwide gross domestic product (GDP) growth and continuation of an IC inventory replenishment trend that began in the second quarter.
Compared to a dismal first half, the second half of 2009 will bring 18 percent growth in the worldwide semiconductor market, 43 percent growth in foundry sales and a 28 percent increase in semiconductor capital equipment spending, according to a soon-to-be released mid-year update from IC Insights.
IC Insights (Scottsdale, Ariz.) has been projecting for months that the semiconductor industry would begin to rebound in the second half of this year. In April, Bill McClean, the firm's president, reaffirmed IC Insights' projections of double-digit semiconductor growth in 2010 and 2011 and said the industry would begin to recover in the second half of the year.
In a report issued in May, McClean said the semiconductor market had finally hit bottom and would gain momentum in the second half of the year.
In a research bulletin dated Wednesday (July 1), IC Insights said seasonal strength is likely to propel second half cellphone and PC unit shipments up by 18 percent and 15 percent, respectively, compared to the first half of the year.
"While the velocity of the semiconductor industry recovery is subject to debate (slow, moderate, fast, etc.), at least the discussion over the next few quarters will be about how much sequential growth can be expected in instead of how far the markets are going to fall," McClean wrote in the research bulletin
Prospects improve for foundries, equipment
While the worldwide GDP is projected to fall 0.8 percent this year overall, growth is expected in the second half of the year, IC Insights said. The firm said it expects China's second-half GDP to climb by nearly 9 percent.
Foundry sales are already on the road to recovery, said IC Insights. According to the firm, IC foundry revenue nearly doubled from the first quarter to the second quarter. Foundries such as Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp. said in recent months that sales hit bottom in the first quarter and were beginning to recover.
IC Insights also projected relief for the semiconductor capital equipment industry, saying most of the chip vendors that the firm tracks are planning to spend the majority of their capital expenditure budgets for the year over the next six months.
"There is no doubt that, as a group, the semiconductor equipment suppliers have taken the worst beating of any of the companies involved in the current semiconductor industry downturn," McClean wrote.
Despite expecting a stronger second half, IC Insights has projected that the semiconductor industry will contract by 17 percent overall in 2009. The forecast is more optimistic than some, such as Gartner Inc., which mostly recently predicted 22 percent contraction. Others are even more optimistic, such as Semico Research Corp., which projects that the industry will contract by 12 to 13 percent overall.
IC Insights plans to release its "2009 Mid-Year McClean Report" at the end of July. The 200+ page report, subsequent updates and other services are available for a subscription fee of $1,890. More information is available on the firm's website.
