Global Semiconductor Product Market Forecast--Help Wanted: Spenders and Lenders

Abstract

Report Summary

The global erosion of asset prices, reduction in credit availability, and declining personal and business income will be reflected in a 19.6% drop in semiconductor revenue in 2009. Declining confidence levels, resulting from recent shocks and increased uncertainty about the future, will lead to more conservative spending practices even after liquidity improves and the economic recovery is well underway. Assuming that governments and central banks around the world continue the aggressive fiscal and monetary actions that they began to take in 2008, and that these actions are largely successful, growth in 2010 is forecasted to be modest, at 11.8%, followed by 9.7% in 2011 and 8.8% in 2012.

This report analyzes the overall economy and resulting underlying demand for semiconductors and how the demand matches with projections for semiconductor capacity, as well as other underlying factors that will affect semiconductor demand and pricing.

All historical and forecasted data in this report are consistent with the data in the companion report IN0904560SSF Global Semiconductor End-Use Forecast - Is Anyone Buying?

• In-depth discussion of economic impacts on the semi industry, by region, as well as worldwide and regional GDP forecasts
• Semiconductor revenue forecasts by major end-use segment
• Wafer fab capacity and utilization
• Semiconductor capital expenditure and revenue forecast
• Worldwide semiconductor unit, ASP, and revenue forecasts
• Semiconductor revenue forecasts by region and WSTS product categories

• Semiconductor revenue is projected to decline by 19.6% in 2009 to US$199.2 billion
• Recovery will begin slowly in 2H09
• It will be 2012 before semiconductor revenue again reaches the level of 2007

• Semiconductor companies - fabless companies, manufacturers, and foundries
• Companies that serve the semiconductor companies listed above: semi equipment companies, distributors, and material providers
• Any company that is impacted by the outlook for the building blocks of everything that is electronic
• The financial community

• How will global and regional economic conditions specifically impact the semiconductor industry?
• Under what conditions might this industry begin to turn around? When might that be?
• What is the outlook for capacity, supply and demand?
• How is this downturn different from others?
• How is the economy affecting capital spending now, and in the future?

• This is NOT your typical downturn.
• Semiconductor revenue is forecasted to decline by 19.6% in 2009 to $199.2 billion.
• A slow recovery is expected to begin in the second half of 2009; however......
• It will be 2012 before semi-conductor revenue exceeds its 2007 level.

Methodology

The fundamental semiconductor market driver is demand for products that use them. So, ideally, a semiconductor forecast would be the sum of the forecasts for each of those end products, based on their bills of material, but the wide range of products that use semiconductors make this approach unfeasible. So we utilize the next best method and rely on forecasts for major products in each of the end-product segments covered by In-Stat' s end-use focused services. These key products serve as proxies for the broader markets.

These end-product forecasts are supplemented with information about overall economic conditions, inventory levels, semiconductor industry capacity, and investment expectations and are, ultimately, reconciled with the forecasts for specific semiconductor product types, taking into consideration conditions unique to specific markets to develop price forecasts and regional breakouts.

We continue to conform to the Semiconductor Industry Association (SIA) and World Semiconductor Trade Statistics (WSTS) categories and definitions. All historical data in this report ties to WSTS reported data and all forecasts are based on current WSTS category definitions. However, WSTS does occasionally change definitions to keep its categories relevant to the changing market. Significant changes that affect the data in this report are as follows:

• In 2005, digital bipolar ceased to be a separate top-level category and was moved into the MOS logic category (which was then renamed simply logic), where it accounts for well under 1% of the total. Consistent with this change, for 2005 and later years, we have set units and revenue in the digital bipolar category to zero. However, consistent with our practice of not rewriting history, we continue to treat digital bipolar as a separate product category for 2004 and earlier years.
• Other changes in reporting categories (such as combining the programmable logic and standard cell categories in 2005) have been relatively minor and their effects at the level of detail of this report can generally be ignored.

Note that all data tables are generated from data with additional digits of precision and are subject to rounding and truncating errors in the final digit. Therefore, some “total,” “% change,” and “% of total” figures may differ slightly from those that would result from a direct calculation using the rounded and/or truncated numbers contained in those tables.

Throughout the report, data associated with a year marked by an asterisk (*) is forecasted data.