February 3, 2014
2014 IC Market Forecast
Semiconductor Packaging News attended an IC Insights seminar last week in Boston, and the meeting was upbeat. The seminar was hosted by Bill McClean of IC Insights who provided predictions on the semiconductor markets for 2014. The presentation focused on data from the McClean Report including analysis and forecasts for the IC industry.
Bill McClean, President, IC Insights
Bill's forecast for 2014 is based on an improving global economy and
growing mobile devices providing a better year than 2013. He predicts IC sales growth from companies based in the USA and Asia, but slowing with companies based in Japan and Europe.
IC Insights forecasts 7% IC unit growth for 2014 based on expectations of global GDP to rise to 3.4% from 2.8% growth in 2013. There could be adjustments up or down based on the global economic recovery, but Bill thinks 2014 could be upwardly revised as the year progresses. Bill is predicting a rebound in GDP for the USA, Europe and China for 2014 and 2015.
IC Insights concludes 2012 was the trough in the current IC cycle and 2013 showed IC unit growth of 5%. IC Insight projects semiconductor industry unit growth of 6 -10% unit growth over the next few years with the peak cycle occurring in 2016. He also predicts less volatility than previous cycles due to the day to day information available with global technology. The forecast growth mirrors a worldwide continued growth for mobile technology and expanding middle class in the emerging markets.
IC Insights is forecasting a lower trend line for IC unit growth shipments over the next several years compared to the last cycle. Bill noted that it takes 2.5 tablets to match the IC components of a notebook PC, so even though tablets are growing quickly, they use less computing power. The current supply and demand are almost equal, except for the leading edge capacity which continues to grow quickly. This situation will create less pricing pressure and average ASP's should stop dropping and begin to increase slightly.
The continued growth of fabless companies lead to a discussion regarding the effects "Fabless and Fab-Light" companies are placing on the IC manufacturing process. Fabless growth is higher than IDM growth and he expects this trend to continue. With Semiconductor Fab's costing $4 billion the trend of subcontracting IC manufacturing continues to expand. A problem may result, that unit growth will exceed capacity in the peak cycles causing longer lead times, double ordering and shortages. Bill mentioned a new phrase which concerns some industry companies, "Fab-Tight".
After two years of declines in CAPEX growth, IC insights is predicting CAPEX budget increases of 7% for 2014. Bill commented, the "big keep getting bigger" and the top 10 companies in IC spending now account 55% of all CAPEX spending compared to 40% in 2005. There was a brief discussion of 450mm technology and the timeline for production is being pushed out to 2017 - 2020 due to high costs and limited number of companies committing to development.
We thank IC Insights for including us in this presentation. To learn more about The McClean Report, visit this link: http://www.icinsights.com/services/mcclean-report/report-contents/
, Editor / Business Manager
Semiconductor Packaging News