The two analysts, speaking at the ISS Europe conference held in Grenoble, France, this week, took similar positions and ascribed the two year boom to a return to normal unit demand allied to flat-to-increasing average selling prices (ASPs) for chips.
McClean, CEO of IC Insights, predicted a long-term compound annual growth rate for the chip industry of 9 to 10 percent due to stable ASPs over the next few years. McClean said the difference between IC Insights and Gartner and some other forecasters is that they see ASPs continuing to fall by about 4 percent each year dragging the typical 10 percent unit growth in the chip market down to just 5 or 6 percent growth in monetary value.
Malcolm Penn, founder and CEO of Future Horizons, said there is a 10-year cycle in ASPs and that a turning point has been reached. Growth in ASPs has been happening since the fourth quarter of 2009, he said.
Penn predicted a 9 percent growth year for 2011, up from the 6 percent growth he was predicting in December 2010. "ASPs are recovering and it could easily go into double digits," he said. "Manufacturing capacity will be tight in 2011 and 2012. Fab capex is not yet overheating," he said despite bullish plans from such companies as Intel, Samsung, and TSMC. Penn added that 2012 would be even better at 16 percent, before a contraction in the market by 2 percent in 2013 as overcapacity does strike the market.