Analysis

Are the semicon industry’s bumpy rides really a thing of the past?

Paul van Gerven
Leestijd: 4 minuten

The semiconductor industry thinks it has entered an era of growth almost unfettered by cyclicality. Don’t believe it, says one contrarian analyst.

The semiconductor industry has lined up over 450 billion dollars for capacity expansions, not far off from the size of the entire market in 2021. Historically, such capital expenditure would make a lot of people nervous. Adding that much capacity would surely overshoot demand, driving average selling prices down and sending the industry into another one of its infamous downturns.

Such fears seem to have disappeared. The current narrative is that the industry has entered a new era. Gone are the days that the industry growth is primarily powered by a single killer application – the PC, the internet, smartphones. Thanks to rapid digitalization and the rise of disruptive technologies, there will always be a number of applications to sustain semiconductor growth.

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