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IC forecasts: 10 reasons to cheer or fear

Posted: 24 Mar 2010     Print Version  Bookmark and Share

Keywords:IC market  automotive  LCD  base band  solar cell 

6. Base band blues
Why I'm bullish? "Qualcomm, MediaTek, ST-Ericsson, Infineon and Broadcom will dominate in base bands over the next five years, a market that will grow to more than Rs.69,265.50 crore ($15 billion) by 2014. These companies will continue to offer the most highly-integrated, power-efficient base band processors capable of supporting high-rate wireless, new applications and cloud computing, either through integrated applications processing or partnerships with suppliers of external applications processors," said Christopher Taylor, an analyst for Strategy Analytics.

Why I'm worried? Fewer players in base band. TI's exit. And China's grey cell market. I'm told a no-name brand in China can roll out a handset in two months with little R&D, compared to six-to-eight months for Nokia, Motorola, etc.—with high R&D.

Stuart Robinson, an analyst with Strategy Analytics, added, "In 2009, MediaTek moved up to second in market share terms of revenue on the strength of its presence in China and the grey market, passing ST-Ericsson and Texas Instruments. At the same time, market share leader, Qualcomm, made gains in W-CDMA, pushing farther ahead of its competitors in terms of revenue."

7. Disk drivers
Why I'm bullish? HDD manufacturers repositioned themselves in this Great Recession, managing to show growth in 2009, according to The Information Network. The market grew nearly 11 per cent on a unit basis in 2009 and is slated to grow another 11 per cent in 2010, according to the firm.

Worldwide revenue from shipments of HDDs used in computer applications is expected to amount to Rs.127,910.29 crore ($27.7 billion) in 2010, up 18.4 per cent from Rs.108,054.18 crore ($23.4 billion) in 2009, according to iSuppli.

Why I'm worried? Fewer players in HDD controller business. "LSI is gaining share in HDDs at Seagate (enterprise and client) and at Hitachi (notebooks). Surprisingly, LSI announced it now has wins at Western Digital, Toshiba, and Samsung (formerly sole sourced customers for Marvell)," said Hans Mosesmann, an analyst with Raymond James.

8. Not so bright solar market
Why I'm bullish? Edwin Mok, an analyst with Needham & Co. LLC, said: To be fair, we acknowledge that the solar industry will experience slower demand, falling prices and margin headwinds in mid-2010.

Based on current installation rates in Germany, we believe the slowdown in 2H10 will not be as bad as what we saw in Q4 08/Q1 09, when both Spanish and Germany markets shutdown. Additionally, if we assume the market will remain at 3.0-3.5 GW in 2011, the lower installation in 2H10 could setup for better Q/Q growth in 2011. We remain optimistic that Italy, the U.S., Japan, Ontario and even China will be growth drivers this year, as we are seeing signs that the "red-tapes" in some of these markets are lifting. While Germany is approaching a plateau in terms of solar installations, we believe the solar industry will become less concentrated in 2010, and we expect newly forming solar markets to experience meaningful growth in the next few years."

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