Friday, August 26, 2011

Notes from SEMI's Silicon Valley Lunch Forum: don't take off the economy's training wheels too quickly!

Speakers at SEMI's Silicon Valley Lunch Forum (8/24/11, Santa Clara, CA) spoke of the "uncertain economy" and asked the rhetorical question, "is it time to panic?"

Brian Matas, VP at IC Insights, noted that the temporary "solutions" to economic woes being implemented in the U.S. are impacting overall IC growth. Likening economic stimulus to a set of training wheels on a bicycle, Matas said that taking the wheels off must be done carefully, seeming to imply that politically, the U.S. may have gone from stimulus to austerity too quickly. Responding to a question about quantitative easing 3 (i.e., QE3), Matas said that it would be a good thing for the economy if the Fed were to implement it.

Dean Freeman, Research VP at Gartner, warned that rising semiconductor inventory levels are causing a drop in ASPs. Furthermore, the financial meltdown is impacting consumer spending - something to keep in mind when approximately 60% of all ICs sold worldwide are due to consumers. Of particular note: Japanese consumers are reining in spending as a reaction to that country's disastrous earthquake earlier this year and U.S. consumers are also spending less. As a result, Gartner expects slow growth for the next two years until the supply/demand outlook improves. Capex spending is forecast to increase by about 11% in 2011 driven by Intel, foundry and NAND spending, said Freeman. Semiconductor capex should see strength from 2Q11 through 2013 before retrenching. The research firm will be issuing its complete forecast update in September.

Dan Tracy, Sr. Director, Industry Research and Statistics at SEMI, told forum attendees that materials suppliers are seeing a significant slow down in the third and fourth quarters as a result of an over-reaction to the disaster in Japan earlier this year. Additionally, higher prices for gold and other metals and raw materials, as well as higher prices for oil are impacting the cost of materials manufacturing.

-- Debra Vogler

No comments:

Post a Comment