What makes this forecast any different than the ones we've wanted to hear and yet didn't see fully realized on our balance sheets? For one, the latest forecast from Linux Consulting is a multi-dimensional model that includes many different data sets and allows for the types of interactive fluctuations that we see in our real, business world situations. Consumer and enterprise confidence is based on reactions to economic changes on both global and regional levels, adding these data appropriately into a nuts and bolts model looking at manufacturing supply and end-product demand along the supply chain, gives us a more sophisticated, and accurate view into the machinations of the semiconductor industry's growth trajectory.
The wider growth horizon
According to the Linux forecast, general, global economic growth will continue to gain in 2013, but will do so slowly. Expectations are best set accordingly, while acknowledging there is a real degree of uncertainty which could mean an another +/- 1% in growth forecasts during 2013:
In the face of these headwinds, the more than 250 forecasters surveyed in the December 2012 Consensus Forecasts produced a consensus subdued, below-trend global growth of 2.6% in 2013. This is a slight improvement over the 2.5% now expected for 2012, but less than the 3.1% achieved in 2011 and below the long-term potential real global growth rate of around 3.5%. While the consensus averages to 2.6% for 2013, there is a relatively wide range in individual forecasts, reflecting the uncertainty in the outlook. Individual outlooks depend most on how forecasters see developments in the US and Eurozone.
With the backdrop of recent and ongoing financial uncertainties, such as the recent, January 2013 US fiscal cliff concerns, the lingering EU debt crises, and the still watchful eye on Emerging Markets (EM), constrained growth is par for the course through the year, according to Linux. The subdued, modest growth we experienced in 2012 will improve slightly in 2013, but stay on the below-norm level as a result of the widespread and now long-running economic uncertainty that we have experienced.
The 2013 global, cross-industry growth that is forecasted, however, will not likely be seen during 1Q13, but rather will begin to gain momentum during 2Q13 and be more fully realized the second half of the year. The reason for this timing lies in the expectations for the US economic turn-around forecasted to rebound to roughly a 3.5% range during 2H13.
Which way and when in 2013?
So, while overall growth continues and is forecasted to mount, the looming questions are when and what do these macro numbers mean for semi?
The numbers for Semi are thankfully better than for the global and regional economies, putting 2013 just below the 6% growth for our industry. This number comes directly from the parallel growth expectations linked with the global and US trends. As 2013 sets the substantive groundwork for confident, sustainable growth, 2014's forecast pushes growth to a more exciting 7.0% level as enterprise and consumers alike find confidence and comfort in the positive momentum.
The Semi numbers are, however, not only linked to the macro-economic indicators, they are also based on manufacturing data within the Semi industry. The Linux forecast model "relat[es] final demands to aggregate semiconductor production (measured by SEMI’s Million Square Inches of silicon processed, MSI) […]." In considering this variable, it was noted that "weak demand was anticipated in 2012, and that by early 2013, enough improvement in end markets occurs to push growth up at a modest pace," namely to the 6% level and 7% for 2014.
Drill down into Semi markets
Compelling aspects of Linux's forecast model is the level of penetration into Semi's markets, pinpointing and contextualizing where and why various subsectors are more likely to experience growth than others:
The overall picture of MSI growth breaks down into the expected performance of device segments and technology nodes. Despite the shift to consumer electronics and mobile platforms, we expect growth to be concentrated in CMOS products with a continuing slowing of unit growth and analog and discrete devices. Strongest growth will remain with flash memories, and advanced foundry logic devices targeted at tablets and phones.