A combination of economic disruption and effects from this year’s Japanese earthquake and tsunami have upset the semiconductor applecart, a senior analyst said today.
Malcolm Penn, speaking at the International Electronics Forum in Sevilla, said: “Economic disruption always derails the chip market. Structural imbalances, debt, liquidity and associated financial uncertainties still have a long way to go.”
He said that people aren’t buying anything but the absolute growth numbers are still pretty good at an average of 11 percent over the last 30 years.
Penn said the world is like a suicide bomber – and no one wants to unpick the bits of the bomb in case they cut the red wire which blows everything up.
He hit out at the stock exchanges. 73 percent of players, according to Penn, use strategies and algorithms to hold shares for a few milliseconds. “It’s time for corporations to start rebelling against Wall Street,” he said.
There is a major slowdown in unit demand. Penn believes that can only change when the financial situation is sorted out. Front end book-to-bill has never been so low for so long. Analysts had predicted a growth of 12 percent but that isn’t going to happen. He predicted a one percent growth in the third quarter, but overall growth for the whole of 2011 will probably only be about one percent.
If the financial uncertainties are sorted out, Penn said that we face tightness: “We’ve had 10 quarters of underinvestment.”
Provided that the financial crisis lessens, Penn thinks growth in 2012 could be eight percent, and as much as 22 percent for 2013, with the industry worth around $400 billion.