Granted the first quarter is typically a slower or down quarter for the semiconductor and electronics industry, coming off of the usually higher demand holiday fourth quarter. This year has been no different, as the latest industry reports and individual company reports show variability in revenue for 1Q12. What we are certain of is that inventory corrections are continuing and demand is seen as steadying. The steadying of demand is, of course, essential to the industry, as we seem to be emerging only slowly from the "wait-and-see" approach to investments and production.
Supporting the growth and confidence increases are not only the hard data showing parity coming to the fore in the February book-to-bill ratios (see our discussion here), CAPEX investments by leading fabs, such as TSMC, are expected to be increased later this month based on demand increases for their 28nm-node processes, according to a report in DigiTimes 4/10/12 (see also more on TSMC from EETimes here, and see Solid State Technology's summary of Gartner's fab equipment forecasts for 2012 fab forecasts). SMIC is also reporting that it may double the initial forecast for 1Q12 growth, expecting to see a 14-15% increase in revenues based on solid demand from customers, according to a DigiTimes report 4/10/12.
Meanwhile, demand for tablet PCs, smartphones, and ultrabooks continues to be strong but with little room for error due to intense device and price competition. Apple's recent release of the new iPad saw strong adoption rates, according to this recent MacDailyNews report. While many of the major smartphone OEMs are competing head-to-head, some experienced down trends last year due to the intensified competition from strong, new devices from Samsung and Apple, especially. However, with global demand not set to abate, and with feature phones giving way to entry level smartphones as well as the increased push into 4G as discussed recently in Smith's MarketWatch Commentary (see Smith's latest MarketWatch Quarterly for more on LTE), there is considerable market share that the various handset companies are vying for (see this business case example from ComputerWorld). Time will tell how many companies will be left in this space, but the sector itself is not slowing down and continues to boost overall semiconductor and electronics industry growth.
Industry analysts continue to see strong growth for the all-in-one mobile PC device category (tablet PCs and ultrabooks) that is expected to help support growth for newer HDD and SSD drives, which will support the memory and PC sectors as well (see for example this report on newer HDDs and this one for SSD forecasts from iSuppli).
In sum, while we are still transitioning from the "wait-and-see" position from 2011, the industry data are certainly underscoring continued stabilization and demand which is pricking more optimism across the entire supply chain. For more detailed analyses on selected industry trends, watch for the general public release of Smith's 1Q12 MarketWatch Quarterly which was sent to subscribers in late March (free subscription here).