MARCH 1, 2001 RELEASE
IC Insights Expects Quarterly IC Market Growth to Begin in 3Q01
Scottsdale, Arizona — March 1, 2001 — IC Insights believes that sequential quarterly growth will return to the IC industry starting in 3Q01. When examining the last five IC industry downturn periods that occurred over the past 20 years (see attached Figure), there is both good and bad news regarding the current situation.
The bad news is that in each of the past 5 downturn periods, the "initial quarterly decline" in the IC market was always followed by 2 additional quarters (Quarters 2 and 3) of flat to negative sequential IC market results. However, the good news is that in every one of the past 5 IC industry downturn periods, the third quarter after the initial decline (Quarter 4) 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.
The current downturn portion of Cycle 6 (i.e., the sixth IC industry cycle since 1970) began in 4Q00 with a 3 percent sequential quarterly decline in the IC market. According to historical trends, this negative quarter will be followed by quarterly IC market contractions in 1Q01 and 2Q01. However, sequential quarterly growth should return to the IC industry beginning in 3Q01. The timing of this renewed growth is expected to coincide with the elimination of the vast majority of excess IC inventory that was accumulated by electronic system producers throughout 2000.
It is interesting to note that quarterly IC unit volume growth patterns are similar to those of IC dollar volumes. In all of the past 5 cyclical downturn periods since 1980, IC unit volume shipments recovered within 3 quarters after the first quarterly sequential decline was registered. Similar to the IC market, IC unit volume shipments first displayed a quarterly decline in 4Q00 (-3 percent). Thus, quarterly IC unit volume growth is also expected to re-emerge in the IC industry beginning in 3Q01.
Further details of these quarterly IC industry trends will be published in the upcoming March update to The McClean Report — 2001 Edition.
About IC Insights
IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the integrated circuit industry. Founded in 1997, IC Insights offers coverage of global economic trends, IC market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of emerging markets for ICs.