I love reading what crystal ball pickings about technology are popular each week. Take for example, what the experts and “fortune tellers” (analysts) regularly pen about what will happen to platforms or segments when global, or large-scale national hiccups occur. By hiccups, I mean disruptions such as lasting changes in the global machine (U.S. vs. China, COVID-19, super volcanos, wars and such).
One recent example is semiconductors. The general consensus, before the U.S./China and COVID-19 crises, was that semiconductors would have another lackluster year. Then, during the pandemic, as well as the U.S/China saga, the forecasts started changing. Most were of the downgraded type.
Of course, however, there was little doubt that almost everything (except toilet paper manufacturing) would see a downturn.
But not content to say things were on a downhill slide, some analysts kept on forecasting growth, for example, VLSI Research’s semiconductor equipment forecast.
Earlier this year the firm predicted that the semiconductor equipment business would see six percent decrease in 2020. Now they are saying there will be a seven percent growth in 2020. That was with COVID-19 and the escalation of the U.S./China situation. So, they are seeing an upturn in the semiconductor market based on equipment sales.
On the other side is Walt Custer, an analyst at Custer Consulting Group. From his SEMI blog, he suggests that “tough and unpredictable times are ahead” for the semiconductor industry.
Next, on Wednesday morning, I received a report that notes that the wafer fabs will take a significant hit through September for wafers and related materials, globally. That the hit will be nearly 30 percent.
The forecast is by Linx Consulting and Hilltop Economics. They go on to say, “we are advising clients supplying materials into the wafer fabs and packaging supply chains to develop contingency plans for a sharp decline in product demand of as much as 28 percent.”
Another source, very in touch with the industry, Semiconductor Engineering, paints a picture of a lesser slump. While they note that chip foundries are not facing a gloom and doom scenario, they are not listing numbers either.
So, as one can see, there are varying opinions – the result of analysts playing with numbers and looking at the business end rather than the technology end.
However, one source that is more on the Kool-Aid side than reality, is SEMI, where they predict a “a record level in 2021 of $67.7 billion.” That must be a foolish WAG in a world where COVID-19 and Donald Trump exist, and the future is rather unknown. Do they think that on Dec. 31 the COVID-19 and U.S./China issues will just evaporate, and the world economy will take off like a rocket?
Who to believe…who to believe…
It is relatively safe to predict three months out. Unless we have another significant outbreak, or some other significant event, that will clamp people down the same way the virus did, not much else will move the needle in such a short time. It is much more difficult to predict nine to 12 months out in a world with unsettling conditions.
Of course, the semiconductor industry is made up of a variety of segments and some of them will fare better than others. Some will actually see an uptick from the pandemic, others will suffer from it. For example, the auto power semiconductor sector, which is tightly wed to the movement of the auto industry is expecting a, roughly, 20-percent decline for all of 2020.
Another one is the internet of anything/everything (IoX). ABI, one of the organizations I find has a good forecasting track record, thinks this sector will take about an 18 percent hit.
There will also be some growth sectors. One will be medical devices. It does not take a rocket scientist to see that the medical industry will undergo a radical change. Even if things return to 100 percent normal, the benefits of various forms of telemedicine will remain strong. Why? Because they have found a way that can work within the industry.
For some time now, there has been a quiet crusade to make more use of telemedicine. It promises to make medicine more efficient.
COVID-19 has given that a photon-drive boost. Now the move will be to ratchet up research in remote telemedicine devices and peripheral technologies. Tangentially, this will help the wireless segment, both in device integration and network evolution. In fact, the numbers, over the past few months, show an 80-percent decline with in-person medical visits with a corresponding increase in virtual visits.
Fundamental and provisional segment shifts, both for growth and decline, will emerge. Segments include retail, the enterprise and its digital transformation, and telemedicine, as well as many others.
For example, retail-related electronics (kiosks, electronic advertising, shopping area networks, etc.) will suffer because the return to normal shopping habits will be long in coming. This will not, likely, be a fundamental shift although there is likely to be a permanent, to some degree, swing from physical to virtual. This is because of advances in virtual shopping platforms for, historically, hands-on items such as vehicles.
The enterprise’s fundamental shift will be to a more remote workforce. This segment will see, at a minimum, sustained growth. It could surge, however, depending upon how fast and how widespread the at-home working movement evolves. In any event, this will offer an opportunity for semiconductors and other segments, such as wireless, to expand home-based worker environments and support them from the central location where they once worked.
Circling back to telemedicine, it is likely to be the shining star of semiconductors and one of the fundamental segment shifts. COVID-19 has managed to achieve, in a matter of months, what has been an aspiration of the industry for years. Along with virtual visits will be an explosion in monitoring devices, especially wireless ones which will provide the data for all kinds of medical procedures and data collection – many in real time.
In any event, monumental change is coming. Some of the fundamental shifts would have happened anyway on their own time. Others were certainly accelerated by it.
However, things will never be the same. As is the case so often in history, crisis is the harbinger of change, sometimes, massively.
However, for semiconductors and wireless, agility will be the key, going forward, regardless of how the brave new world emerges.