LONDON — Bill McClean, analyst with IC Insights Inc. (Scottsdale, Ariz.) has provided ten reasons that support the idea that 2010 could be between a good and a great year for the semiconductor industry.
McLean takes good to be a year of 15 percent growth, which is his current forecast for a chip market of $270 billion. A great year would be one of 20 percent market growth or greater.
McClean's reasons to be cheerful one to 10 are as follows:
1) On Jan. 26, 2010, the International Monetary Fund (IMF) raised its worldwide GDP forecast for 2010 from 3.1 percent to 3.9 percent. This is a large upgrade to a forecast, which due to the law of large numbers, usually only changes by very few tenths of a percent.
2) On Jan. 21, 2010, it was announced that the U.S. Index of Leading Economic Indicators was up 1.1 percent in December of 2009. The index had risen 8.8 percent over the previous eight months, the largest increase since 1983.
3) The Institute for Supply Management (ISM) stated that the January 2010 U.S. manufacturing sector Purchasing Managers Index (PMI) was 58.4 (any figure over 50 indicates growth). Moreover, the PMI order figure was 65.9, the highest since 2004.
4) China's manufacturing sector PMI was 57.4 in January of 2010. This was the highest PMI figure in China since the survey was started there in 2004. This PMI is greater than when China's GDP was growing at greater than 11 percent in 2006 and 2007.
5) China's GDP growth in 4Q09 was 10.7 percent. IC Insights believes that it is likely that China's GDP growth will be at least 10 percent in 2010, up from 8.7 percent in 2009. China is the world's largest market for cellphones and automobiles and the second largest for PCs.
