Around this time in the year we begin to anticipate that the cyclical upturn will start as orders and ramp ups begin in order to meet the awaited demand for year-end holidays, back-to-school and corporate refresh, thanks to year-end budgets with improved visibility. 2012 was to promise strong growth; for the top demand segments of mobile and tablets, that's been quite true (recall Smith's review of CE revenue momentum).
Semi forecasted to see continued growthEarlier this week, we commented on two industry research reports, IHS iSuppli and SIA, which underscored the negative impact that continued uncertainty in the US and EU markets is having while Japan and Asia Pacific are showing stronger growth.
With more analysts reporting, as summarized by David Manners from ElectronicsWeekly, we are seeing an average CAGR forecast for global semi for the next five year cycle, 2011-2016, ranging from the conservative 3% by IC Insights to 8% by SEMICO but the majority agreeing around the upper 4% CAGR for the period.
Growth not limited across semi sectors
Interestingly, the semi growth forecasts include both DRAM and NAND memory, based particularly on the increase and strength of the low- to mid-end smartphone adoption, as noted by ElectronicsFeed citing the recent DRAMeXchange report. According to the report:
Although mobile DRAM contract price fell by approximately 10% QoQ in the first quarter, mobile memory revenue unexpectedly increased by 12.4% QoQ. The revenue growth can be attributed to manufacturers allocating more capacity to mobile DRAM production as well as demand stimulation from increased low to mid-end smartphone shipments.
This is a significant growth moment, as DRAM had seen modest growth this year, but stalled out in June, as discussed by Smith & Associates' Todd Banker in EBN. There is still the lingering question as to how 2H12 ASPs for DRAM will trend, but should the overall modest but relatively certain growth continue as forecasted, and if the market conditions are well understood, that the reduction in capacity due to loss of lines and reduced utilization, then the ASP rise from lack of supply should boost revenue at a higher rate than volume sales (see also the report by SolidState Technology reviewing the recent semi forecasts).