Chip market to contract in 2013, says analyst

Chip market to contract in 2013, says analyst

SANTA CLARA, Calif. – The semiconductor industry will contract by 0.5 percent in 2013, but despite the squeeze and some consolidation the long-term outlook for growth remains strong, said Handel Jones, a veteran market watcher, speaking at the annual Common Platform event here Tuesday (Feb. 5).

Sluggish foundry revenues this quarter are a good indication of softness in the overall chip market through June, said Jones. “We think the third quarter will be stronger, then Q4 softens a bit, so we’re conservative this year. But things could change if the price of memory declines,” said Jones, chief executive of International Business Strategies (Los Gatos, Calif.).

“In general, companies we talk to are fairly cautious this year,” he said in an onstage conversation with Brian Fuller, Silicon Valley bureau chief for EE Times.

Among other factors, Jones blamed a sluggish global economy with growth slowing in China and Japan and Europe in a slump. On the positive side, he listed LTE, MEMS and the medical sector as long term growth drivers

“We don’t see any long term problem in semiconductors and electronics growing, but underneath that there is a lot of turmoil,” he said.

Click on image to enlarge.Foundries continue solid growth amid a flat-liner chip market, Jones said.

TAG:Handel Jones Capital Equipment Common Platform Semiconductors Foundries China EDA