Despite good sales, the semi industry has decided to suppress the truth from itself leading to shortages that make it and the connector industry as “tight as a drum”.
That’s the view of Malcolm Penn, CEO of analyst firm Future Horizons, in his latest report to his top flying clients.
Penn points out that orders last December rose by 13.3 percent compared to December 2009 – full year orders rising 29.3 percent for the whole year.
He said: “Few people believe there is a supply problem in prospect. Just as this time last year, industry denial is rampant, way beyond reasonable caution and ignoring the underlying trends.”
However, on the other hand, the Dramurai – the DRAM vendors – are switching a lot of their production to mobile because of increased demand for Mr Smartphone and Mrs Tablet.
The bright star in the firmament this year is servers, says Penn – on average a server will have a staggering 30GB per box in 2011, he says, and that in turn will create up to 60 percent demand for server DRAM.
Penn says Taiwanese vendors are “stuck in a technology trap” and can’t afford to invest in future technology – there’s likely to be consolidation in the DRAM supply base. And Elpida and Hynix have bad net cash positions, and are scraping together cash to cover short term debt.