Wary Penn forecasts 16% IC market growth in 2024

Before the bubbly starts flowing, Penn, Future Horizon’s CEO advises “proceed with extreme caution.”

“This is not the next super-cycle of the semiconductor industry. It’s too soon to celebrate the chip market recovery while unit demand, bread and butter products and the economic outlook languish,” he explains.

Right now according to Penn, IC unit growth is 12.2% below the long-term trend line and it will be two or three quarters before the balance is restored.

“You can’t claim recovery until unit growth resumes,” asserts Penn.

What did surprise Penn and many in the semiconductor industry was the strong growth in Q2 in 2023. “It caught the industry off guard,” he notes, “even TSMC was warning of a -4% to -9% quarterly decline.”

Logic, memory and micros led the way, charged by high speed compute and AI though again Penn cautions, “This was driven by average selling prices (ASPs) not units.”

With Q3 and Q4 weighing in to mirror Q2’s growth, the 2023 decline was limited to -8.6%.

Turning to this year Penn’s 16% growth forecast is based on those growth rates tailing off to produce Q1 growth of 3%, backed by plus 2.5% in Q2 and a 3.5% uptick in Q3, before a 1.5% decline in Q4, producing a market worth $608 billion.

Penn estimates unit growth will kick in for the second half of the year, and ASPs impact will start to temper.