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Comparing, contrasting Gartner Dataquest forecast, KPMG/SIA Kahuna survey |
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Dec 20, 2007 at 06:08 AM |
Two reports have come out that present some interesting comparisons and contrasts: Gartner Dataquest's latest semiconductor capital equipment market forecast and a KPMG/SIA joint survey of C-level chipmaker executives.
The outlook is a bit grim for the equipment folks in 2008, according to Dataquest, which projects that capital expenditures will plummet 13.2% to $51.3 billion, largely due to a drawdown from DRAM manufacturers and lack of a hoped-for "revival" from the foundry sector---and despite continued increases from those capacity-crazy NAND flashers and a possible logic spending upside.
Other than "other spending," which will nosedive 23%, the wafer fab equipment segment will take the biggest hit next year, dropping 10.2%.
Dataquest thinks the market will bounce back a bit by the end of 2008 (which means it might be pretty bad in the first half of the year) and then will trend significantly northward in 2009 and 2010, popping up 8.6% and 13.5%, respectively (and topping $63 billion in '10).
The KPMG/SIA poll surveyed the collective state of mind of execs from 94 of the top 100 IDM, foundry, and fabless companies. Seems 99% of the K-level (that's Chip Shots jargon for "Kahuna level") crowd believes there'll be revenue growth in the next fiscal year, with about half (52%) seeing that increase hit at least 10%. This is a tad softer than last year's poll, which found 60% of the execs expecting a 10%+ pop. The probabilities for profitability is another matter over the next five years, with 27% of the K-levelers believing profits would rise, 15% said they would fall, 33% thought they'd be flat, and 26% copped out with the hand-waving "volatile and unpredictable" response.
Comparing the execs' attitudes about capital expenditures with the Dataquest numbers produces a few eyebrow raisers. Some 57% of the Kahunas think cap ex will rise in 2007, and 36% see it going up at least 6%. This is less bullish than last year's results, which found 72% of those surveyed expecting a cap-ex increase and 53% a 6% or better increase.
As for R&D spending (which Dataquest doesn't mention, but still counts for something), 75% of the K-bunch expects an increase, with 49% thinking it should be at 6%+---which is down from last year's poll numbers of 85% and 62%, respectively. Still, for those tool suppliers that carve out part of their business in the research and development sectors, that's pretty good news, at least in terms of expectations. (But then again, as a wise man once told me, "Expectations can kill you!")
So, if more than half of the K-level corner-office types believe that cap ex will go up, how does this jibe with Dataquest's gloomy scenario? What we don't know is the relative outlook of the big spenders in the survey, the top 10 or 15 companies with the fattest cap-ex budgets. If they're largely paring down their spending, then it wouldn't matter if the small(er)-potato companies hiked their cap-ex prodigiously. Then there's the nagging question of how many of the Kahunas surveyed either lied or don't know what their own companies are planning to spend on capital goods and such next year....;-)
And how many of those surveyed came from the fabless community? That group doesn't exactly blow out the cap-ex numbers since there's not a whole lot of process equipment, back-end gear, or manufacturing facilities purchased by those who don't fab their own chips!
But the fabless guys may have the last laugh: 64% of the Kahunas surveyed believe the chipmakers-that-don't-actually- make-ICs would be the most profitable industry segment over the next half-decade. Letting someone else buy those expensive toolsets and facilities---or not---can have its advantages, after all.
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Comment by GUEST on 2008-01-02 14:51:57
Tom, Pretty interesting comparison on the forecast horizon. The surveys typically run so late that they are old by the time they are released. World is just going too fast.
It also looks like the industry is getting what is going on at the fabless/foundry world pretty badly wrong.
I would recommend check out WeQuest at WeSRCH.com regarding further comments on the topic.
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