Semiconductor Industry Status June 2008

Industry status as of September 2008
The SIA has released revenue numbers for July 2008 of $20.73 billion dollars (raw numbers not 3 month moving average) up 3.1% from $20.1 billion dollars in July of 2007. 3.1% growth for July brings the year-to-date growth to 6.2% . Table 1 presents month-over-month and year-to-date growth by month (please note that numbers are updated from the previous posts).
Table 1 - 2008 Growth Rates Month Month-over-month Year-to-date Jan -0.2% -0.2% Feb 3.9% 1.8% Mar 7.7% 4.1% Apr 5.5% 4.4% May 8.1% 5.1% Jun 13.2% 6.7% Jul 3.1% 6.2%

Figure 1 presents revenue by month from 2005 through 2008.

In figure 1, the brown, green, purple and orange lines represent 2005, 2006, 2007 and 2008 revenue respectively.

2006 began the year even with 2005, then showed steady growth until December that once again ran even with 2005. December was a disappointing month and brought down the year-to-date average growth to 8.5% versus the 9% growth we were expecting.
January 2007 started the year with strong growth but February showed negative growth, March moved positive and April showed strengthening growth, May and June both showed negative growth, July and August showed strong positive growth before Septembers disappointing 1.0% growth, Octobers rebound to 6.6% and then Novmbers -0.7% and finally the year closed out in December with 1.7% growth.
For 2008 January started the year slightly down and since then growth has been positive and strengthening until the latest month. For July the growth rate dropped from Junes 13.2% to 3.1% and pulled down teh year-to-date growth for teh first time this year. We began the year believing we would see negative growth due to excess capacity but we saw the market come into balance much faster than we expected. With Junes results we had thought that 2008 could hit double digit growth but now the outlook is turning more moderate.

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Industry Status as of September 2008 - a relatively weak July growth of 3.1% brought down the year-to-date growth for the first time this year. July calls into question the outlook for the balance of 2008.
Industry Status as of August 2008 - A strong 10.1% growth rate for June continues the strengthening trend for 2008. In spite of the well documented issues with the US economy we expect 2008 to be a strong year for semiconductors with growth approaching 10% for the year.
Industry Status as of July 2008 - May showed 9.3% growth bringing the average growth for the year up to 5.4%. We now expect the year to continue to strengthen and avearge growth for the year to come in at high single digits with 10% growth possible.
Industry Status as of June 2008 - Fab capacity has come into balance with demand faster than we orginally expected. 2008 started weak but has been consistently strengthening. We are now expecting not only positive growth for the year but possibly as much as 10% growth.
Industry Status as of May 2008 - March 2008 has come in at 10%, well above our expectations. Year-to-date growth has now moved from -0.2% to 3.8% growth improving the outlook for the rest of the year. We still remain concerned about excess capacity.
Industry Status as of April 2008 - 2008 has begun with two months of negative growth. Due to excess capacity coming on-line coupled with the weak US economy we believe 2008 will be a year of negative growth overall.