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What next for 2011?

Posted: 07 Jan 2011     Print Version  Bookmark and Share

Keywords:KOSPI  semiconductor index  green technology  serial interface  test 

Most people in the industry, including myself, underestimated the severity of the downturn when it came in late 2008, and then underestimated the strength of the recovery when it bounced back in mid 2009. The question is: what happens next?

The indices that might give us a clue are ambiguous. The Semiconductor Industry Association (SIA) index for shipments in Asia Pacific began to plummet in September 2008. It started to rise again in March 2009, but it didn't reach pre-crisis levels until November of that year. Since then it has increased more slowly but most recently has leveled off again. The general consensus is that shipments will increase by about five per cent next year.

SIA monthly billings

Figure 1: The SIA monthly billings' three-month moving average for Asia Pacific (Jan. 2008 to Aug. 2010).

Similarly, the KOSPI semiconductor index fell sharply from March 2008, rose swiftly to a peak in December 2009, fell away and is now leveling off.

So the background information sources aren't giving any clues to what the future holds other than a sharp swing one way of the other does seem unlikely. Therefore, we have to look at other factors which may help us determine the future direction, and there is plenty of evidence to make either an optimistic or a pessimistic case.

A case for optimists
Let's start putting the case for the optimists. The thirst from consumers for new technology shows no sign of abating. The rate of adoption of smart phones, the phenomenal success of the iPad, the exponential rise in the sale of Kindles, the popularity of the 3D TV and film experience are all evidence that consumers desire for high performance devices continues to grow. And alongside this goes the need for more speed, more bandwidth and more processing power to deliver the quality of experience consumers want. At the base of the pyramid, then, lies a massively strong desire to consume the products the electronics industry provides.

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