The global core silicon market bottoms out and looks forward to the next quarter's recovery


According to iSuppli, global core wafer market sales have fallen by nearly a third in the past six months and are now beginning to show signs of bottoming out.

The normal semiconductor boom cycle is generally five to six quarters. Other historical factors, as well as the timing of the government's economic and fiscal stimulus policies, indicate that the market will bottom out early, and the boom will hit a low in the second quarter of 2009. . Core silicon is the key chip in an electronic system that performs specialized, separate functions. This is an integrated circuit (IC) that makes a DVD player a DVD player rather than another type of system. iSuppli has placed proprietary standard products (ASSP), programmable logic devices (PLDs) and application-specific integrated circuits (ASICs) in the core silicon category.

The current recession is fundamentally different from any previous semiconductor boom cycle. The dominant force driving this cycle is from outside the chip industry, mainly the global economic situation, while at the same time hitting corporate investment and consumer spending. Even economic experts and financial authorities can't see clearly when the rescue measures and interest rate cuts introduced by countries can reverse the global economic downturn. Although the current forecast is that the core silicon market will show a quarter-on-quarter growth in the third quarter of 2009, the more important indicator is the 3/12 growth, which is the quarter-on-quarter growth. It is expected that the latter will not be expected to improve until after the first quarter of 2010. The 12/12 growth, which is the most recent four quarters and a year ago, is expected to be realized by mid-2010. But the recovery may be quite strong, with annual growth rates for core wafers in both 2010 and 2011 reaching double digits. However, absolute sales are hard to exceed the 2007 level by 2012.

Positive signs are constantly emerging

The latest positive signal is that the China Purchasing Managers Index (PMI) has rebounded to around 50%, showing that at least in China, procurement managers believe we have returned to the expansion phase. Although the PMI of other countries has not yet broken the 50% mark, the Chinese PMI data clearly further enhances people's confidence. For the core silicon industry, the strongest positive signal is still the largest demand growth in some application areas.

Most of the revenue in the core silicon market depends on several applications.

In some areas, the most prominent are desktop PCs and 1G/2G handsets. Unit shipments are expected to decline in 2008-2009, but other areas such as 3G handsets, mobile PCs and set-top boxes are still expected to grow, despite the bleak economic situation. These markets alone are enough to drive the core wafer market to achieve the expected growth in 2010/2011.

If the current economic deterioration is more serious than expected, the above recovery time may also be postponed. If such a doomsday situation really occurs, the impact will far exceed the core silicon and the overall semiconductor market. This situation seems unlikely. I hope so, and the current signs of optimism are at least relative to the past six months. The words are optimistic, illuminating the road to light and leading us out of the still dark tunnel.
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