2012 2H Semiconductor Market Forecast

The Semiconductor market

The market is hard to predict as there are many factors which govern this violatile market of electronic products especially under current growing US EU economic turmoilds.

Recalling that there is huge demand on iPhone when it was first launched in USA on July 2007, since then it had created an enormous demand for the latest Model, with added feature on each new model each time it was launched, 3G, 3GS, 4G, 4GS... how about iPhone5?  There have been queries on what new feature that Iphone5 would have!?

Apple Will follow Nokia?

Many people saying that Iphone will be the 2nd Nokia if they still maintain their selling price at a premium, and no known new breakthrough of new feature. Well, yes, there are still a lot of Chinese people in demand of the new iPhone5, however China has no such huge GPD growth as the provious 5 and 10 years anymore. Will they slow down buying luxary Handphone as they do now on the luxuary goods Rolex, Chanel, Dior etc.!? Estimated China will have only GDP 7.6 in the year 2012. whihc is lowest in the past 10 years.

China today

Just in YiWu, a Chinese Industrial City, half the World’s Christmas decorations from Pastic Trees, Christmas lights and Led Santa caps are being produced, those good days are gone, the average shop floor wages jumped up 30% as just in 2011 to about RMB$2,800 a month. Though they have been replaced by automated machine, but there is a certain limit that the product could be automated. Profit is being eroded by up rising cost, like what HK was experience in 1983-1993, whereby HK moved to China for next site for manufacturing.

Back to China , with so many opportunities back home in their hinterland, those poor peasants from have little incentives to seek strenous factory jobs in YiWu. It is difficuties to get workers now; the China Society has changed!

China shoe markers now takes whole team of Ephiopian University graduates bring them to China train them up to gain some leverage between loss of profit, and no labour in the hot market.

What is it in the Market?

When you are asked to take out Apple for the maket, what else is leaving?

RIM is slow down, Nokia is saying to lay off another 10,000 staff last week. Sony has not much new stuff except the floating Touch feature.. Well that is Samsung, but viewing Samsung speed of launching his new product, they have a huge spending on R & D, and their high cost of manufacturing due to tooling cost is high as most of them are still made in Korea. Sooner later there will be 4 handphone makers, others smaller one would either been merged or sold.

Bullish ASE

News popped up as ASE said it could reach its goal of growing shipments by 15%, and that Ultrabooks, Windows 8 and new smartphones would drive growth in the second half. 24 June 2012.

IC makers, Assembly houes are still keep on buying leadframe is 2X, 3X up in their coming Quarter forecas, in vew of the past history, they can not keep growing for more than  4 months. Everyhing goes up must fall down. We believe that everyone is being pushed by Apple to be qualified and once if the business of Apple iphone 5 is not as good as expected, there will be domino effect of falling. That could cause semiconductor economy to slow down the pace.

Foxconn

Well, Foxconn as the major manufacturers of all Apple products is doing conservatively for their iphone5 line preparation, as least not as aggressive as they did for Iphone 4 and Iphone 4S... heard that they cut 3 lines out of ten lien purchase by president Kwok at last minutes. Is that a sign to tell us that Foxconn is also feeling skpetical about Apple because Tim Cook as not as strong as Steve Jobs as an Apple Icon!

LED

LED is still in the hibernating mode, as I expect that there will be some movement for more equipment buy by Oct, 2012. but that could not be so high as we experiencd in 2010. Probably some new line for new process, new special product line to have better cost factor to make next gen. LED, no major Expansion plan for production of mid high end LEDs.

Maintaining Automobile market

Automobile takes just 5-6% of the total Semiconductor market, that is not significant nor inluential at all thpough most of the Automobile is doing OK but under such economic atmposphere, people will tend to delay the new car purchase or replacement programme. Only Limited market Like China and some Asia Countries could maintain the sales.

US EU Situation getting worse?
The US, EU market is slow moving, Rommey and Obama presidential campange still running outright proclamation of who is right who is wrong on CNN every day... see who will be the last crusade for US economy, I would say Obama will continue to be the next president and the US economy will not be too bad in shape but will not have any good surprise in the coming 4 years!

No surprise for 2H

What else we can see new application? new product that could further bring the makert hot!? Seems Nothing?

So as our forecast the overall market or 2012 is not as good as expected as 2011. or be a bit pessimistic, to be about 90-95% of 2011 at best...

HK Snob