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There are some silver linings in the economic downturn that’s impacting the semiconductor industry, according to Rich Wawrzyniak, senior analyst for ASICs and SoCs at Semico. In the short video interview below, Wawrzyniak talks about his projections for semiconductor, ASIC and SoC revenues for 2009. He also predicts a rather modest 8 percent reduction in ASIC design starts, and concludes by describing electronics as one of the “least hurt” industries in the current recession.
This video discusses the following predictions for 2009:
In a normal year, these would be dismal numbers, but 2009 is not a normal year. Other industries are taking much deeper hits. Thus, my first question in the video is, “why aren’t things worse?”
The Semico view is at odds with a Gartner prediction that ASIC design starts will fall by 22 percent in 2009. During a portion of the interview not included in this video clip, Wawrzyniak noted that Semico counts design starts somewhat differently than other market research firms. Semico includes derivative designs and respins. The reason? “Effort is still being expended. It requires a new mask set and tapeout,” Wawrzyniak said.
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Also not included in this video clip is Wawrzyniak’s view of the silicon IP market. In 2008, he said, the market grew 4.9 percent, the lowest growth since Semico began tracking IP. In 2009 it’s expected to grow 2.9 percent. Why positive growth at all? While fewer SoCs will ship in 2009, they’ll have more IP, he noted.
Wawrzyniak is looking for a semiconductor industry rebound in the second half of 2009. He believes consumer confidence is slowly improving, and he argues that electronics is one of the “least hurt industries” because consumer demand is still there, and you don’t need a loan to buy a cell phone.
Like everyone else, Wawrzyniak is predicting a difficult year for the electronics industry in 2009. But it helps to have some perspective and to recognize that things will ultimately turn around. It’s not enough to just manage one’s business for the recession – it’s also important to get positioned for a rebound.
Many semiconductor companies experienced revenue declines of 40-50% in 6 months and therefore resulted in 10-12% of the workforce being layed off. May be these companies did not go out of business or declare bankruptcy but I can not think of any other industry other than automotive that has been as severely affected over the past 2-3 quarters.