IBS predicts that the semiconductor industry will face "threefold **" as the U.S. economy changes

Handel Jones, founder and CEO of the consulting firm International Business Strategies (IBS), expects that the growth rate of the semiconductor industry in 2012 will be 6 to 7%, but in 2013 it will decline again due to the US economy slowing down. Speaking at a SEMI-sponsored annual symposium in California, Jones also pointed out that IBS expects that the memory market will grow by 11% in 2012 due to price increase, and the growth rate of non-memory chips at the same time is predicted to be 6. %.

Jones said he expects the U.S. economy will continue to borrow this year to gain support, because incumbent President Barack Obama seeks reappointment, and the U.S.-led U.S. Congress tries to launch its own camp candidate instead. However, with the end of the US presidential election, Jones believes that the United States will take austerity measures to curb the 2013 government's fiscal deficit soaring, and thus cause the entire United States economic development to slow down. "However, the semiconductor industry will experience a serious recession and it is difficult to predict." Jones added: "I think the downgrade may be quite steep."

IBS predicts that the 6-7% growth rate of the semiconductor market in 2012 is slightly higher than the forecast data previously announced by other market research institutions; IC Insights expects the growth rate of the semiconductor market in 2012 to be 7%, IHS iSuppli The forecasted data is 3.2%, and Gartner's forecast is only 2.2%. However, IHS iSuppli predicts that the semiconductor market growth rate in 2013 is 6.7%. IC Insights believes that the market performance in 2013 is comparable to 2012.

"In the long run, we still see a lot of bullishness;" Jones said: "But the problem facing the industry is that many companies have very low profits." These manufacturers are buying low-priced products in exchange for market share. Jones also predicted that there will be one or two chip makers declared bankruptcy in 2012; he pointed out that chip makers have encountered many yield problems at the 28-nm process node, especially in high-dielectric/metal-gate technologies. The 20nm node will also encounter similar difficulties: "We think 20nm will be a very difficult technology node."

Jones listed the "triple threats" faced by the semiconductor industry. One is through-silicon (TSV) 3D chip technology, the other is the adoption of 3D transistor FinFETs, and the third is 18-inch wafers; but he said that the industry adopts TSVs. The time horizon of technology has been slower than expected: “As we continue to move forward, the threshold for each generation of technology will increase. And the reality is that you cannot overcome those challenges with past experience.”

Combining some predictions about the long-term prospects of the industry, Jones estimates that Qualcomm could reach a chip manufacturer with annual revenue of $30 billion in 2015 (the company’s chip revenue in 2011 is about $9.5 billion); he also predicted that South Korea’s Samsung’s chip business revenue will continue to grow, posing a major threat to the semiconductor industry’s leading Intel’s throne.