For the semiconductors and electronics industries, the agility of the otherwise conservative consumer to overcome continued poor, but improving unemployment numbers, albeit very modest. According to The Wall Street Journal, "consumer spending increased in October by 0.7% as incomes rose and inflation remained low, boding well for economic growth. Personal income rose by 0.2% for the second straight month." (cf also here) Furthermore, as reported in WSJ, US GDP forecasts for 4Q09 are also on the rise by almost one-half a percent, from 2.7% to 3.1%.
These are important economic indicators because we need to see improvements in consumers' economic health to support the positive forecasts for semiconductor growth today and over the coming three years. As many analysts have identified, and as we all were painfully reminded during the past 18 months of recession especially, the consumer IS the key to health and growth in our industry. To underscore this importance, the five growth areas in semis as identified by analysts cited here, here and here are all oriented around the daily lifestyle improvements of the consumer: netbooks, portable navigation devices (PNDs), digital televisions (DTVs), DVD recorders, and video game consoles.
The direct correlate for improved consumer sales is the critical health of the IC sector in semi. Sales for ICs seen as remaining at low inventory levels, according to DigiTimes earlier this week ("Taiwan IC designers expect low inventories through January," 11-24-09), but with the requirement of respectable holiday sales, globally. Beyond inventories is the important compound annual growth rates (CAGR) which are also presently forecasted in the 20 to 30-percent range for the above listed five consumer product areas. Those are respectable numbers but need the bolstering of consumers who have shed their skittishness and are also looking forward into a more prosperous next decade.
Meanwhile, let's keep our fingers crossed for this holiday weekend's sales results and hope that it is a good sign that Chinese New Year and Valentine's Day fall on the same day in 2010... Why not, after all analysts and soothsayers all love numerological alignments. Here's wishing for a happy holiday season.