One of Penn's four horsemen of the apocalypse fell of his horse in 2020 but for once it did not cause the customary slow-down in the semiconductor industry.
Penn has consistently argued that the state of the semiconductor industry always depends on four factors: global GDP; IC manufacturing capacity; the number of units produced; and average selling prices. These are what he calls the four horsemen of the semiconductor apocalypse.
Conventionally a crash in the world's GDP such as happened in 2020 – a fall of 4.4 percent – would be the indicator of a severe recession in multiple fields of endeavour and almost guarantee a subsequent fall in the chip market. But this time some industries stayed strong and 4.4 percent collapse in GDP accompanied a 7.3 percent growth in the semiconductor market. "It has happened before, but only about three times," observed Penn, speaking in an on-line virtual version of the Future Horizons' industry forecast seminar.
Gross Domestic Product (GDP) by region and time. NI = non-industrialized, C&EE = Central and Eastern Europe. Source: Future Horizons.
With GDP set to be 5.2 percent in 2021 the V-shaped nature of the business impact of the pandemic is clear, said Penn. The recovery will be strong in Europe and the UK partly because they, with their exposure to automotive and industrial sectors, suffered the worst with GDP contractions in 2020 of 8.3 and 9.8 percent respectively, he said.
Next: Capex takes time to impact