Semiconductor 2010: Divergent Opinions

I would fall over in a dead heap if all the pundits and organizations that forecast the semiconductor sector ever agreed on the outlook for the industry. However, there is usually a somewhat unified higher level vision of what is going to happen over the ensuing dozen months or so.

At this point in time, there doesn't seem to be much of a unified vision as to what 2010 holds. There is the optimistic camp that sees low inventory levels, promising new products, rising stock prices, etc. and forecasts a banner growth year, at least over 2009. There is the pessimistic camp that looks at high unemployment rates, tight capital, and strained capacity and forecasts that 2010 might only be slightly better than 2009.

The only thing these two camps seem to be able to agree on is that neither has a very high level of confidence that their position is correct. This rapidly moves beyond the theoretical to the practical for people running companies. They must decide whether it's "off to the races" or "hunker down and survive." 

I believe this uncertainty will continue to be the major driver for the semiconductor industry for the foreseeable future. From a people perspective, this will translate into a reticence by CEOs to commit to permanent headcount additions and their continued use of contract personnel and consultants at all level in the organization.