Bill McClean, IC Insights

While most of the media focused on the launch of the Apple iPad last week we attended Bill McClean's annual McClean Report seminar in Boston. For me this seminar has become an annual preview on the state of the semiconductor industry.

I like his analysis as Bill is a cup half-full kind of person and we need more of them in the industry these day's, and he has been correct more often than he has been wrong.

He very accurately described what 2009 would look like last year and if his predictions for 2010

Steve DeCollibus, Managing Editor, Semiconductor Packaging News

are accurate we are in for a pretty good IC recovery. With integrated circuit average selling prices stabilizing to increasing over the next 18 months we can expect a CAGR of between 8-10% over the next 18 months.

Key observations discussed at the seminar were:

• The Americas IC market was the only major region to show growth in 2009! Even the high-flying Asia-Pacific IC market declined in 2009. Why? Think memory market.
• Capital spending for memory devices is forecast to more than double in 2010! Find out why IC Insights believes this is not enough to avert memory shortages and significant price increases in 2010.
• Since late in 2008, IC Insights stressed that the 2009 IC market should be thought of in quarterly segments and not in total. IC Insights’ clients heard early in the year to expect a big finish to 2009. It should be noted that the worldwide 4Q09 IC market was 47% greater than it was in 1Q09.
• Overall, the worldwide IC market declined 10% in 2009. In contrast, the NAND flash memory market surged by 20% during the year! Even better growth is expected in the NAND flash market in 2010! Moreover, 2011 is forecast to show even stronger NAND flash memory growth than in 2010. What is driving this expansion?
• DRAM average selling prices (ASPs) in 4Q09 were 65% higher than in 1Q09! Find out why IC Insights believes this is only the beginning of the trend toward higher DRAM ASPs. Are severe shortages in store for 2010?
• PC unit shipments were flat in 2009! Considering that the global economy endured its worst recession in 63 years (since 1946) in 2009, flat PC unit shipments were quite an amazing accomplishment.
  Moreover, cell phone unit shipments were down only 5%. Now consider that both PC and cell phone unit volume shipments are forecast to increase at double-digit rates in 2010! What effect will this have on the IC industry? Are we on the cusp of an all-out IC market boom for 2010?
• Microprocessor sales reached almost $10.0 billion in 4Q09. This was an all-time record high, surpassing the previous high set in 4Q07! This record high was set during the worst global recession since 1946. What happens when the PC market takes off in 2010?
• China's IC production accounted for 1.8% of the worldwide total market in 2009, up from 1.2% in 2004. As previously forecast by IC Insights, China is playing only a very minor role in IC production. Will this situation change by 2014?