Monday, January 11, 2010

Semiconductor Industry Update

If we look at the chart, we can see that the semiconductor firms have been very cautious. They are trying to maintain a very tight inventory, very close to their demand. They dare not even to replenish their inventory to Q4 2008 level though the demand did not collapse until Q1 2009.

iSuppli believes this continued tight management of inventories will help the semiconductor industry to attain double-digit percentage growth in 2010. After a 12.4% decline in 2009, the firm forecast global chip revenues will rise by 15.4% in 2010.

There is one catch in that article, mentioning only chip revenues to rise but did not mention about unit volume. We need to look at the volatile DRAM price to figure out the unit volume.

Looking at the trend chart, the price is firming up, but softer than Q4 '09. Taking into the consideration of book-to-bill still above 1, there is a good chance of unit volume to grow between 15-20% in 2010.

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