Semico forecasting February 2012 as bottom next upswing begins: 2Q12

PHOENIX, USA: The IPI has been showing a weak second half for over a year. Given June's poor performance, it stands to reason we're looking at a three quarter downturn: 3Q11, 4Q11, and 1Q12. OEMs will burn off inventory during the second half of 2011 while foundries cut back on capital expenditures.

As we forecasted during our Semico Summit this May, we're currently seeing the result of excess build-out in tablets, PCs, and smart phones with HP being just one of many companies finding sales in those markets to be disappointing. Not that there aren't winners, both Apple and Amazon are already rumored to be working on the future of the tablet market as we write.

Of course, the consumer market isn't all we look at for our forecast - general economic indicators continue to point to slower economic expansion for the balance of 2011. Electronics are pervasive throughout the economy, meaning macroeconomics has a significant influence on the semiconductor market. Recent global economic woes and natural disasters are contributing to our cautious outlook.

Our 2011 semiconductor revenue forecast shows revenues declining 1.96 percent over 2010.