Interview in the Wall Street Journal, Morris Chang anticipates the semiconductor industry will take three years to recover to 2008 sales levels. The pounding the semiconductor industry has taken over the past few months due to the financial crisis has forced semiconductor sales to drop dramatically. According to the WSJ:
The WSJ continues:The global semiconductor industry has yet to hit bottom and likely won't recover fully from the current downturn for another three years, according to one of the industry's senior figures, Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang.
In an interview Friday, Mr. Chang said the industry, which has been hard hit by the global economic slowdown, was "pretty close" to the bottom. But he said that a return to the sales volumes that the industry had before the current slump would be extremely slow. "You get a precipitous drop and a very slow rise," he said.
"I think it will be 2012 before the total revenue of the semiconductor industry gets back to the '08 level," said Mr. Chang, who founded Taiwan Semiconductor in 1987.
Mr. Chang also said he expects industry consolidation to pick up. He predicted a continued decline for companies that make both consumer products and semiconductors. Of the companies that still do both, he said that only Samsung Electronics Co. and Intel Corp. are in a strong position. He said others would likely divest themselves of their semiconductor operations, leaving production to companies like TSMC, which manufactures semiconductors on a contract basis for other companies.
Mr. Chang has worked in this industry for a long time and his thoughts do carry some weight. It will be interesting to see how this all pans out over time, especially the consolidation of the foundry industry. What will be more interesting will be to see how the new foundry company being spun off will survive. The foundry business is a tough business to play and one can only imagine the perils of entering the industry at this point in the economic cycle.
Wall Street Journal: Executive Sees Chip Industry Recovery in Three Years
2 comments:
Well, Mr. Chang today said in the Chinese language news that 1) the industry has already hit bottom 2) Taiwan will recover before the US does 3) hopefully things will recover by 3rd/4th quarter.
I don't know if there's a contradiction here, but he is known for saying a lot of very strong statements that later contradict themselves.
Hi There,
Thanks for your comment. He also said the same in the WSJ, he said the semiconductor industry is near the bottom but the recovery ti 2008 sales figures will take 3 years.
Thanks for the comment.
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