This is a summary by Malcolm Penn, CEO, Future Horizons. For those who wish to know more, please get in touch with me, or, with Future Horizons.
December’s WSTS results were as boring as they were predictable, with no serious data revisions (thankfully) and the results right where we expected. December’s year-on-year IC unit growth was 8.9 percent that, with the 3.5 percent growth (yes GROWTH) in ASPs, yielded a respectable double-digit value growth of 12.8 percent.
And this, on the back of a weak Q4 memory market that saw ASPs fall 13.1 percent vs Q3-10! The yearly growth vs 2009 weighed in at 31.8 percent, hitting $298.3 billion, just shy of the elusive $300 billion threshold.
The market is right where we said it would be at our recent 2011 Forecast seminar; we reiterate our position that 2011 will be a good year for the industry. Choppy first-half waters for sure, but watch out for a whopping 2H-11 ricochet.
Already the early warning signs are there: HP has warned of slipped Q1 PC shipment due to component shortages, from sensors to CPUs; TSMC and UMC are curtailing their Chinese New Year annual maintenance programmes due to serious capacity shortages; there is no excess inventory in the pipeline and capacity is maxed out; the front-end book-to-bill has now dropped back below unity; and memory prices have rebounded sharply in the pre-Chinese holiday period.
The whole industry food chain is now an overstretched taunt spring … with no easy roll back option. The 21C10 industry model is way past its sell by date … time for a radical rethink? Plan A is NOT sustainable.