Sequential growth in IC sales to resume in Q3,
predicts new report
Historical trends over 20 years suggest an upturn is
around the corner, says research firm
By J. Robert Lineback
Semiconductor Business News
(03/02/01 05:49 a.m. PST)
SCOTTSDALE, Ariz. -- There is light
at the end of the current
market-downturn tunnel, according
to a new report from IC Insights
Inc., which is predicting that
sequential quarterly growth in
integrated circuit sales will resume in
the third quarter of 2001.
If so, that would be good news--no
make that great news--for
semiconductor companies, which
continue to be hammered by sharp
declines in first-quarter shipments
from what were slumping sales in the
final months of 2000.
IC The new brighter outlook,
however, has a muddy lining for the
second quarter. Based on historical
trends from industry recessions, integrated-circuit suppliers
can expect another sequential drop in revenue during the
second quarter of 2001, said IC Insights.
"The bad news is that in each of the past five-downturn
periods, the 'initial quarterly decline' in the IC market was
always followed by two additional quarters of flat to
negative sequential IC market results," said the Scottsdale
market research firm. "However, the good news is that in
every one of the past five IC industry downturn periods, the
third quarter after the initial decline has always displayed
positive sequential growth.
"This quarterly pattern held true even in the disastrous IC
inventory burn year of 1985 and global recession year of
1998," IC Insights said.
The research firm noted that the current downturn began in
fourth quarter with a 3% sequential decline in total IC sales
as system manufacturers began to clear out excess
inventories. Using 20 years of market data, IC Insights
predicts that the chip markets will continue contractions in
the first and second quarter, but growth will begin again in
the third quarter (July-September).
IC Insight also noted that in the past five downturns since
1980, unit volumes have generally tracked revenue patterns.
IC unit shipments also have recovered within three quarters
after the first period of sequential decline, said the research
firm.
"Similar to the IC market [revenues], IC unit volume
shipments first displayed a quarterly decline in 4Q 2000
(-3%). Thus, quarterly IC unit volume growth is also
expected to re-emerge in the IC industry beginning in 3Q
'01," IC Insight said. |
