Semiconductor Equipment: Temper Your Optimism

In conjunction with the rapid rise in stock values (March 20009 to March 2010), recent forecasts for the semiconductor industry have been powerfully optimistic with up to 87% increases in 2010 capex (capital expenditures) over 2009 and up to 27% in device revenue.  As reported by A. Mutschler [1], iSupply (a major forecast organization) predicts a 21.5% increase in device revenue for 2010; however, isupply also cautioned that the year over year increase is based on low revenue for 2009.  The 2010 forecast is only 8% above the revenue attained in 2008.  The semiconductor industry has been in a maturing mode even before 2000 [2], and it is not likely to be able to sustain annual growth rates of 15-30% for any significant time period.  Demand for electronic systems will continue to grow faster than the general economy, but one would be wise to temper their optimism for the extreme growth the industry experienced during the 1990s.  Some semiconductor equipment companies and related manufacturing technologies such as that used for the fabrication of LEDs, will outperform others as previously discussed, but be sure to benchmark data correctly.  Contact Glew Engineering Consulting, Inc. www.GlewEngineering.com for more information.
References:
[1.]   “Is the Semi Recovery more modest than it appears?”, A. S. Mutschler, Electronic News, 3.8.2010
[2.]   “Semiconductor Device Revue”, M. L. Hammond, Semiconductor International, v27, n8, p102-108, July 2004

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