Logo
 

 

Home Page buttonAbout IC Insights buttonProducts and Services buttonIn The News buttonUpcoming Events buttonSupport and Guestbook buttonUseful Links button

 

  > Home / In The News / Press Releases / June Release

In The News

Press Releases button








 

JUNE 18, 2001 RELEASE

Release PDF Icon

IC Insights Lowers 2001 IC Market Forecast to -21%
Industry to Display Worst Annual Decline on Record

Scottsdale, Arizona — June 18, 2001 — IC Insights has lowered its 2001 worldwide IC market forecast to $139.2 billion, a 21 percent decline from the $177.0 billion registered in 2000. On the bright side, IC Insights believes the global IC market will rebound in 2002 and display a 16 percent increase to reach $162.0 billion.

IC Insights’ “best case” scenario for the IC market in 2001 is a 15 percent decline from 2000. The “worst case” scenario is a 28 percent drop. Note that IC Insights’ forecast of -21 percent makes the 2001 IC market decline the largest on record, surpassing 1985’s 20 percent slide. Moreover, IC unit volume is forecast to shrink 11 percent in 2001, marking only the second-ever decline on record.

Assuming that the U.S. is not in an outright recession, IC Insights still expects a quarterly sequential increase in the IC market of 6 percent to occur in 3Q01. Moreover, an 11 percent sequential jump is forecast for 4Q01. Assuming the IC market follows a path similar to our forecast, the second-half 2001 IC market would still register only a moderate 4 percent increase as compared to the first half of 2001.

One “red flag” that indicates to IC Insights that something is very different about the current IC industry situation is the fact that during a 26-year span from 1970 through 1995 there were only 2 negative growth years in the IC market (i.e., 1975 and 1985). However, in only a 6-year period, from 1996 through 2001, the IC market will register 3 negative growth years (i.e., 1996, 1998, and 2001). This is not business as usual!

Another somewhat frightening piece of data is that from 1995 through 2001, the semiconductor industry will have spent about $250 billion dollars in capital expenditures to receive only about $50 billion in additional semiconductor sales during this same timeperiod. It is interesting to compare the 1995-2001 capital spending versus semiconductor sales metrics with the two previous six-year timeframes (i.e., 1983-1989 and 1989-1995). From 1983-1989, the typical semiconductor producer received $2.32 in sales for every capital expenditure dollar spent. From 1989-1995 that amount lowered to $1.65, and dropped even further to only about $0.20 from 1995-2001 — a greater than 10:1 reduction from the mid-1980’s to the early 2000’s!

IC Insights believes that overspending by the IC producers (leading to overcapacity) is the main factor behind the 1995-2001 worldwide IC market average annual growth rate of only 2 percent. Overall, the average annual increase in IC unit volume from 1995 through 2001 will be about 9 percent. However, during this same timeframe the average selling price of an IC will decline 6 percent per year (from $2.68 in 1995 to about $1.80 in 2001)! It is obvious that the very low average growth rate for IC industry over the past six years is primarily due to IC pricing pressures, and not from a lack of IC unit demand.

More details regarding IC Insights’ revised forecast will be forthcoming in the June 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.

Go to top of page


About Us | Products & Services | In The News | Upcoming Events | Support & Guestbook | Useful Links

Copyright © 2002-2004 IC Insights, Inc. All rights reserved.
Site problems/comments: .