IC Insights: Global IC market will grow this year
According to IC Insights, although COVID-19 has had a catastrophic impact on the global economy, the global IC market is still expected to achieve single-digit growth in 2020.
IC Insights pointed out that from 1984 to 2019, the average seasonal decline in the IC market in the first quarter was 2%. Compared with the fourth quarter of 2019, the market fell by only 3% in the first quarter of 2020, slightly below the 36-year average.
Excluding the years after the severe IC industry downturns of 1985 and 2001, IC Insights believes that the 1Q/4Q sequential quarterly IC market change is a good indicator of the direction and intensity of the annual IC market change.This is because the actual 1Q/4Q change does not directly forecast the eventual annual IC market growth for a given year, but instead more accurately describes the expected direction and intensity of the annual IC market growth rate as compared to the previous year.
IC Insights stated that the reason why this model is a good indicator of the direction of the IC industry’s annual growth rate lies in the seasonality of the IC market itself. Given the typical quarterly seasonal pattern that is characteristic of the IC industry, the first quarter essentially establishes a “base” upon which future quarterly IC market growth will build.
Overall, when the 1Q/4Q performance of a given year is better than the previous year’s 1Q/4Q result, the annual growth rate for that year can be expected to be better than the previous year. The opposite is usually true when the 1Q/4Q performance of the current year is worse than the year earlier. Since the 1Q20/4Q19 IC market change of -3% was much better than the 1Q19/4Q18 IC market change of -17%, IC Insights believes that the annual growth rate for the 2020 IC market, even after incorporating the negative impact of Covid-19, is likely to be much better (3%) than the 15% decline the IC market registered in 2019.
The article is originally written by @SemiMediaEdit posted on SemiMedia. All rights reserved.