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SEMI: Forecasts are Positive at Annual ISS Conference

SEMI: Forecasts are Positive at Annual ISS Conference
Photo Credit: Forbes

In a press release issued January 14, semiconductor industry association SEMI provided synopses of key presentations at its Industry Strategy Symposium (ISS) being held in Half Moon Bay, California.  In SEMI’s words these were: “Encouraging forecasts buttressed by the silicon requirements for the pervasive computing era.”  I have to agree.

As a background, SEMI says that the 35 year-old ISS: “Examines global economic, technology, market, business and geo-political developments influencing the semiconductor processing industry along with their implications for your strategic business decisions.”

The agenda seemed to follow that pretty closely.  From the perspective of global economics Robert C. Fry, a Dupont economist, predicted low but persistent global GDP growth of 3.1% in 2014 up from 2.4% in 2013 and illustrated that there is an increasing correlation between global GDP and semiconductor output, although high tech continues to grow faster than the economy.  Dupont’s forecast is based on global leading indexes which are rising, but not strongly or universally.

Industry analysts also presented their views of the economy and its impact on semiconductor revenues.  IC Insights president Bill McClean forecast that the semiconductor market will grow 7% in 2014 to $351 billion while capital equipment spending will grow 9% to$62.3 billion.  He expects for 2014 to be the first year that communications IC shipments will exceed those of computing ICs.   Gartner research VP Bob Johnson agreed that semiconductor capital equipment spending should improve in 2014, but Gartner projects higher growth of 16-21%.  Johnson said that by 2017, the killer app will be the “title="Electronic Design: Forecast for Semiconductors and Things in 2014">Internet of Things.”  Linx Consulting’s Mark Thirsk provided a very positive 2014 outlook for the chemicals and materials used to manufacture advanced semiconductors, pointing out that materials demand grows faster than semiconductor unit growth thanks to increasing process complexity.  Finally, IHS chief analyst Dale Ford explained that September 2012 marked the commencement of a new semiconductor cycle that IHS expects to peak in the second half of 2014.  Acccording to IHS, semiconductor capital spending declined by 9% in 2012 and by 3.7% in 2013, numbers that cause me to question why IHS does not expect for the cycle to last into 2015.

Speakers from Intel, Micron, Qualcomm,and Samsung shared their outlooks from the perspective of markets in discussions about the advent of pervasive computing.  Intel Labs engineer Lama Nachman said that Intel hopes to change the computer/human relationship through the use of “context” that would consist of “always-on” machines with low-power sensors and I/O to determine when they needed to enter a fully operational state, while providing greater security and privacy.  Micron VP Rod Morgan said that memory chips will play a growing role in an increasingly-connected lifestyle as multifunctional mobile devices add more sensors, but warned that: “The pace at which we enable the infrastructure will determine the speed of innovation.”  Qualcomm VP Nick Yu believes that mobile consumers are looking for an: “Augmentation of human ability,” not only in smartphones but also in other device types.  Finally Samsung’s Pablo Temprano explained that mobile is driving the cloud, with capital spending for the top 4 Internet companies (Google, Microsoft, Amazon, and Facebook) at $10 billion in 2013.

On the business side, KLA-Tencor CEO Rick Wallace illustrated competing industry growth strategies by comparing innovation growth to consolidation-driven industry mergers, asking if: “too big to fail is also too big to innovate.”

All in all, though, it’s clear that nobody is disputing the notion that 2014 will be a growth year for both semiconductors and semiconductor capital equipment, even though there appears to be no agreement at all about the applications that will drive this growth.  For some insight on this readers may want to review another “Chip Talk” blog post that discusses the role of demand in semiconductor forecasts.

Source: Forbes

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