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Semico IC forecast index down

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CIOL Bureau
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SAN JOSE: In a recent trend that may affect chipmakers adversely, it has been noticed that there has been a decline in certain segments like cell-phone, LCD, LED, PC and other product segments, according to an EETimes report. Semico Research Inc. points out that for the first time since December 2009, there has been a drop in the market. In August 2010, the Semico IPI Index (Inflection Point Indicator) experienced its first drop in eight months.

The Semico IPI Index indicates changes in the direction of semiconductor sales growth one year in advance. Semico Research's growth rate for semiconductor sales already assumes a slower year in 2011 at 13 percent year-over-year growth, compared to the 31 percent growth in 2010. The Index tracks 14 weighted, worldwide economic and semiconductor market factors including semiconductor sales, inventories, and printed circuit board sales.

Sources caution that this one drop cannot be considered a trend, and therefore will not affect forecasts drastically. Sources at Semico say that it remains to be seen whether an over capacity situation will be averted in the industry for the latter half of 2011 and 2012, by foundries and memory manufacturers controlling their spending in the first half of 2011.

Since electronic devices will stay on the essential products list for users, Semico is waiting to see how the economic situation n the US and Europe will influence sales. Chip inventories are, however, on the rise, so it cannot be determined whether this trend is a lull, a double dip or major slowdown.

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