The unbelievable flash rise in revenues and unit volumes across the semiconductor supply chain has the smart wireless device (SWD) sector to thank, specifically smartphones and tablet PCs. These devices have been the buzz of the industry and are forecasted to keep semi on track, numerically. The question begs, are these devices able to carry the weight we've loaded on their thin frames?
The disasters in Japan had reverberating effects, though not as deep as initially feared, but the one being felt right now is the IDM "over-stock[ing of] their chip inventories amid concerns of supply chain interruptions," according to DigiTimes 6/20/11. Wafer starts are now slowing in response to concerns over inventory coupled with caution over a possibly softer 3Q11, according to the same article.
While foundries such as TSMC and UMC are slowing their wafer starts, iSuppli and other industry analysts continue to find salvation in the SWD sector and hold their forecasts for a 7.2% expansion in the global semiconductor industry, according to this iSuppli report.
Meanwhile, Semico recently released their 2H11 and early 2012 forecasts predicting a softening in global semi demand, a bit closer to the data the foundries are presently reacting to: "Inventory concerns, price declines, and broader economic indicators herald a semiconductor industry cutback, though Semico predicts it won't last long," as cited in this Solid State Technology overview of the report.
The middle ground is probably best found in the forecasts by the likes of Gartner, whose revised 2011 numbers come in closer to the 5% range for year-on-year growth over 2010, down about one percent from earlier forecasts for 2011. The leading sector behind the growth is SWDs, though not just in pure volume, as we've seen thus far. Importantly, the conversion point of the SWD market (where smartphone intercepts with tablet PC), is critical for driving volume demand (such as seen in smartphone application processor growth reaching 108%, as reported here) but also for driving future technological advances, according to the Gartner report cited here by EETimes Europe:
"One critical trend is the introduction of new generations of high-performance mobile application processors, which form the heart of both smartphones and media tablets," said Jon Erensen, research director at Gartner. "These high-end processors, combined with higher amounts of DRAM and NAND flash memory, will enable the performance and storage required for advanced new applications, including context-aware computing, augmented reality and computational photography."
In short, the SWD sector looks as if it will hold onto its golden egg status for at least a while longer. Additional views into the 2011 forecasts for products, markets and value chain changes can be found now in the latest version of Smith's MarketWatch Quarterly, available immediately with a free subscription, or in early July to the general public.