Future Horizons predicts sharp chip market rebound

October 09, 2013 //By Peter Clarke
Malcolm Penn, founder and CEO of the Future Horizons consultancy, sees a sharp rebound coming in the market for semiconductor chips, despite the fact that global economy is still in "low-confidence mode."

Speaking at the International Electronics Forum held in Dublin last week, Penn stuck to his previous prediction that the global chip market would increase by 6.9 percent in 2013 to $312 billion; and added that it would than increase by 25 percent in 2014 to about $390 billion.

Penn said: "If the second-half 2013 recovery holds 2014 will go ballistic. Ready or not the market could be at $500 billion by 2016."

Penn's position is that after several years of a floundering global economy driving conservative under investment in the semiconductor industry the signs are that both chip demand and chip average selling prices are starting to head upwards at the same time. "Periods of low growth always rebound strongly," Penn said adding that such growth spurts usually take two or three years to unwind.

In 2015 Penn and is forecasting 18 percent growth to take the market to about $460 billion, after which he thinks another slump is likely to take place in 2016 with just 3 percent growth.

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