The Inflection Point of Semiconductor Industry in the Third Quarter

The international financial crisis hit the semiconductor industry. Enterprises in the first quarter capacity utilization generally below 50%. Into the second quarter, we saw some of their business go up again. Recently, the company reported third quarter earnings have emerged, industry trends improved further clarified. However, lack of business growth momentum, industry appears “V type” rebound is unlikely, it should be up in the Oscillation. At the same time, sales of the semiconductor industry this year, fell about 15% of the state has been clearly established. The industry’s current interest rate rise next year industry.

Most Enterprises are Still at a Loss among IDM

Global IDM (integrated device manufacturers) is still picking up. Among them, the good performance of Intel’s operations in the third quarter, profit rose to 1,856,000,000 U.S. dollars has nearly 2,014,000,000 U.S. dollars last year. Intel’s good performance in the global PC market, thanks to the rapid recovery. Another company of interest to NXP. Office this year, the company president RickClemmer drastic restructuring. His strategy is very clear, only to retain competitive projects. At the same time, the chip manufacturing continue to Fab Lite (Light Manufacturing) strategy. NXP in the third quarter results, although sales volume fell, the net profit had risen to 412 million U.S. dollars, net profit to sales ratio reached 39.8%. Therefore, NXP’s action should arouse the concern of the industry.

In addition, other IDM companies, wishful Microelectronics, Infineon, Freescale and Renesas and so being at a loss. This also reflects the development of the semiconductor industry outlook remains uncertain.Memory business profitable fourth quarter 2006 and 2007 due to over investment, the global memory market glut. Since the fourth quarter of 2007, DRAM prices continued to decline. In accordance with the laws of development of industry cycles, sustained decline in the industry after several quarters, the industry should rebound. However, due to the arrival of the international financial crisis, the decline in the memory industry period until the third quarter of 2009, total of 8 quarters.

Estimates from the fourth quarter, the memory industry’s most profitable enterprises. Hynix and Elpida have been in the third quarter of 2009, into the black. Prior to this, Hynix has total five quarter loss, loss of time, Elpida has reached eight quarters.Market research firm iSuppli said that global DRAM industry in 2009 sales fell 12.9% year on year, to 22 billion U.S. dollars. Prior to 2007, the global DRAM industry sales fell 7.5%, to 31.5 billion U.S. dollars; in 2008 fell 25.1%, to 25.2 billion U.S. dollars.

Fabless Industry Growth

Fabless (fabless IC design company) mode has become the most popular development model advocated by the semiconductor industry. IDM has already taken a number of light manufacturing strategy, plant (Fab Lite) or into Fabless companies. As the Fabless at the high end of industry chain, no fab burden, so they are the international financial crisis relatively small. However, the current threshold of Fabless companies involved in growing, Fabless get less and less risk of investment and competition more intense. Although the development of Fabless companies face the many difficulties, but we can foresee the future Fabless Semiconductor companies to enter the global top ten the number of enterprises from the current one (high pass) to many.Global Fabless sales from the 2007 to 510 billion dollars in 2008 to 530 billion dollars, expected 2009 sales to grow to 53.4 billion.

Packaging and Testing Industry in the Course of Recovery

Although many people’s minds, packaging and testing industry, the technology was relatively low (the future to change this view), but packaging and testing company in the international financial crisis situation, operating conditions better than many other industrial chain link .Most companies do not operate on the deficit. Together with industry is in recovery now being, and, packaging and testing industry generally than the market ahead of 6 months to pick up, so the sub sector companies are now entering a recovery track. Before the global packaging and testing industry, several major enterprises, such as ASE, Amkor, and Siliconware’s performance is very good.Global assembly and test foundry and IDM markets, including the two blocks, market research is usually calculated OEM packaging and test market. Global OEM assembly and test market in 2007 were 16.2 billion U.S. dollars and 46 billion U.S. dollars, 2008 was 19.2 billion U.S. dollars respectively, and 52 billion dollars. Forecast in 2009 assembly and test market will decline.

Equipment Industry in the Future Pattern of Little Change

In the semiconductor industry chain, because the equipment finance industry and the very close relationship between the chain, so under the influence of the international financial crisis, the loss of the semiconductor device industry is particularly serious. But these companies are not . I believe these companies through the international financial crisis mark after the rapid rise again. As the semiconductor industry has been gradually approaching the end of Moore’s Law, reducing the feature size may have two to three nodes can continue to walk, so we expect the pattern of current equipment industry, we will not make major changes.By the global semiconductor equipment sales of 45 billion U.S. dollars in 2007 fell to 30.6 billion U.S. dollars in 2008, down 32%; expected in 2009 fell 46%, sales down to 16.6 billion U.S. dollars. However, the equipment industry in 2010 will increase more than 30%.

On Behalf of the Industry Optimistic about Future Growth

Global foundry industry before the top four companies licensed after the merger in the ATIC change, but TSMC’s leading position remained unchanged. Market research firm iSuppli on behalf of the industry is expected to be more optimistic. For example, they expected 2009’s industry sales could reach 17.8 billion U.S. dollars. Prior to this, on behalf of the industry in 2007 sales of 19.9 billion U.S. dollars, 2008, almost unchanged from 2007. iSuppli also predicts that there will be the next global generation of high growth industries. For example, the 2010 sales will increase 21% to 21.6 billion U.S. dollars; 2011, an increase of 15% of 247 million.

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