The industry down-cycle bottomed out in Q1 which was a quarter earlier than the historical trend indicated. “The 18th industry up-cycle has started,” said Penn.
In Q2, the market increased by 6%, instead of taking an expected 5% drop and, with 6% growth forecast in Q3 followed by 1% growth in Q4, the full year forecast improves from an anticipated 22% decline to a 10% decline.
Inventory depletion will not, however, be over before the end of the year, and it could be longer if end demand softens.
Future Horizons’ forecast for next year is a minus 1% Q1, a plus 2.3% Q2, a plus 6.3% Q3, and a minus 1.5% Q4 for full year growth of 9% to deliver a market worth $562 billion.
There should be a return to the historical 8% unit growth trend line next year, however the capex overspend will keep utilisation rates low and excess capacity will keep a tight rein on ASPs.
