We received this piece in an email and gladly share with you, courtesy of IC Insights. It has been adapted for relevance. The key summary is that the integrated circuit industry is under tug-of-war and is being pulled in numerous fronts. The result: Crosscurrents, conflicting signals, mixed-messages lead to high anxiety and uncertainty.
- Worldwide GDP hit a “soft patch” in 2Q11, dropping to 3.1% growth from 4.6% growth in 2Q10. However, second half 2011 growth is poised to be much stronger.
- Apple registered stellar financial results in 2Q11 but guided its 3Q11 sales to be down by 12% sequentially.
- The automotive analog IC market is currently very strong but automotive MCU sales are expected to be weak through 3Q11.
- IC industry capacity is on pace to increase 8% this year.
- In 2011, China will become the largest market in the world for PCs, cellphones, digital TVs, and automobiles.
- After growing by 56% in 2010, smartphone unit shipments are forecast to grow by 60% in 2011.
- Semiconductor industry capital spending reached a record high in 1Q11. However, 2Q11 spending and orders weakened.
- Nokia, the largest cellphone producer in the world, initiated a huge inventory purge in 2Q11. Its cellphone unit shipments dropped by 20 million in 2Q11 as compared to 1Q11, spurred by a 21% decline in sales to Europe and a massive 53% decline in sales to China!
- Corporate PC sales are in the midst of a strong refresh cycle that is expected to continue through 2012. Consumer PC sales are a different story.
- DRAM average selling prices (ASPs) rose throughout the first half of 2011, while NAND flash ASPs were flat.
- Total 2Q11 cellphone unit shipments were down 2% from 1Q11. In contrast, during the 2007-2010 timeperiod, 2Q/1Q cellphone unit shipment growth averaged 7%.
- Tablet PC sales are on pace for at least 50 million unit shipments this year (up from 17 million in 2010). However, tablet PCs are currently causing an inventory problem for the IC industry.