The Electronics Economy in the Second-half of 2011

Published:2011/9/1 1:57:00 Author:Phyllis From:SeekIC

The electronics economy in the second-half of 2011sees positive, but the prediction for global chip market growth in 2011 reduces from 9 percent to 4 percent.

The reduction is adjusted according to the weakness of the semiconductor market in the second quarter of 2011, which has knocked what was set to be an average year of course. The declining sales are partly due to a sharp decline in Japan as it continues to try and rebuild after the devastating earthquake and tsunami of March 2011.

While consumers may be hurting and cutting back in some areas, consumer and business spending on electronics is still relatively strong. U.S. consumer spending on recreational goods and vehicles, which is 75 percent electronics-based, grew 15.3 percent in the first quarter and 9.3 percent in the second quarter. U.S. business investment in equipment and software grew 8.7 percent in quarter1 and 7.9 percent in quarter2.

The problem for the chip industry in the second quarter was clearly mainly a Japanese problem. Compared with the first quarter, Japan market was down 8.1 percent while the rest of the world suffered it only showed a sequential decline of 0.9 percent.

Renesas expects to bounce back 23 percent in the third quarter on yen-denominated chip sales and Intel, AMD and Qualcomm all expect healthy growth with midpoints of their guidance ranging from 7 to 11 percent during the same period, which is a typical seasonal sales pattern. Texas Instruments and STMicroelectronics remain more bearish as they say they expect a slight decline to moderate growth.

Despite concerns about the overall economies in the U.S. and Europe, major drivers of the semiconductor market remain fairly healthy. The semiconductor industry should continue to grow at a moderate rate for the remainder of 2011 and in 2012.

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