We’re happy to share this month’s government abstract from Future Horizons’ March report, that includes the most recent insights and forecasts for the semiconductor market.

Govt Abstract

Annualised development charges continued their declining development in January, with Complete Semiconductors rising 14.8 p.c, down from 15.9 p.c in December and 22.8 p.c in November, led by Complete Reminiscence, at 29.3 p.c, an additional sharp discount from December’s 38.8 and November’s 87.2 p.c numbers.

Logic development was the star performer, at a wholesome 29.7 p.c development, up from 23.1 p.c in December, with Analog ICs shedding floor at minus 1.0 p.c, in contrast with December’s 3.3 development.

Complete Micro was additionally caught within the doldrums, chalking up a 0.5 p.c decline, albeit an enchancment on December’s minus 2.5 p.c development.

The general IC market ended up rising 19.3 p.c year-on-year, down barely from final month’s 20.3 p.c quantity however considerably decrease than November’s 29.5 p.c development. The general tendencies are extra favouring retrenchment vs. development.

Annualised development charges are, nevertheless, only one aspect of the coin. Our most popular measure is the month-on-month development tendencies which we imagine are a extra correct reflection of the general business well being.

The image right here paints a a lot darker outlook, in contrast with the dizzy double-digit annualised month-to-month charges, with January’s gross sales down 5.6 p.c from December, on prime of November’s 8.7 p.c decline. This decline was broadly unfold throughout all business segments, with Logic ICs the one sector seemingly bucking this development.

Fairly the place the general 2025 development price finally ends up will probably be decided by how for much longer the present Hyperscale AI server market growth lasts. Have been that to stumble, be careful for the annualised development price to implode.

AI apart, the general chip market is now getting into its eleventh quarter of recession because the Covid growth collapse in July 2022, with the excessive development price numbers propped up solely by the present AI-fueled market frenzy. All different mainstream product sectors are nonetheless wallowing in extra stock and weak end-user demand.

Historical past exhibits how troublesome it’s to identify the precise second markets flip however the parallels between the present AI exuberance and the late Nineties telecoms community infrastructure bonanza stay uncannily profound, with the one apparent distinction being a lot of the dotcom firms have been ephemeral newcomers whereas at this time’s AI champions embody among the world’s most worthwhile and spectacular teams together with Apple, Amazon and Microsoft, in addition to vNIDIA, the principle provider to the AI financial system.

The sword of dotcom bust 2.0 hangs unnervingly from a thread. If the AI market have been to even gradual, not to mention implode, it could take the chip market with it and our 15 p.c development forecast would in a single day change into a 15 p.c decline.

Increase and bust cycles are sometimes forewarned however previous experiences are extra typically forgotten than discovered and dangerous practices largely unaltered.

You possibly can learn the complete March report right here: https://www.futurehorizons.com/page/137/