“Black Swan” Event Triggers Revision to 2020 IC Market Forecast

“Black Swan” is a commonly used phrase in the world of finance to describe an event that is unexpected and unknowable.  The recent surge of the spread of the coronavirus (Covid-19) and its anticipated negative impact on the global economy and IC market definitely fits the definition of a Black Swan event. Such events typically cause a great deal of uncertainty and that is certainly the case today.

Over a decade ago, Jeff Immelt, then-CEO of General Electric, coined the term “reset economy.”  He used this phrase to describe what he expected to be a very different world following the financial meltdown and ensuing global economic crisis of 2008-2009.

Fast forward to 2020. IC Insights believes that this “reset” philosophy can be applied to the global IC industry this year following the current worldwide disruption to trade and business and the expected subsequent slowdown of the global economy due to the Covid-19 outbreak.

After enduring a steep market decline in 2019, most believed the IC industry was poised for a reasonably robust recovery in 2020.  In fact, January 2020 global IC sales were up a solid 79% from one year earlier in January 2019.  IC Insights had originally forecast an 8% increase for the 2020 IC market in its McClean Report 2020 that was released this past January.

However, with much of the industry based in the Asia-Pacific region—perhaps the most impacted region for the virus—the IC industry is now squarely in the crosshairs of being heavily impacted by Covid-19. IC Insights has had to step back and take a fresh look at its IC market forecast as it stands today and assess what can be expected for 2020.

Will the virus merely be a short-term event that leads to a quick V-shape recovery (Figure 1)?  Is it more likely to expect a U-shaped recovery—one with a couple quarters of seasonally average growth before a stronger upturn takes hold?  Or, is it reasonable to think that an L-shaped market outlook is ahead for the IC market.  In the soon-to-be-released March Update to The McClean Report 2020, IC Insights will present its revised IC market forecast and discuss its current outlook for possible recovery scenarios.

Figure 1

It’s time to “reset” your outlook for a new and very different 2020 IC market.  If you’ve not already done so, now would be an excellent time to subscribe to The McClean Report 2020, IC Insights’ flagship market research report and analysis of the IC Industry. Stay current with the latest developments and changing IC market conditions in this extremely uncertain year by using IC Insights’ monthly updates to The McClean Report that begin this month and extend through November.

Report Details:  The McClean Report 2020
Additional details on IC market trends are provided in the 2020 edition of The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry.  A subscription to The McClean Report includes free monthly updates from March through November (including the 200+ page Mid-Year Update), and free access to subscriber-only webinars throughout the year.  An individual user license to The McClean Report is priced at $4,990 and includes an Internet access password.  A multi-user worldwide corporate license is available for $7,990.

Categories: Fabless Semiconductors, Mergers & Acquisitions, Semiconductor Market Reasearch

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