Some people are desperate to be the first to predict a recovery in key technology markets. We’ve said many times that the semiconductor market, which sells chips into all things electronic, is a bellwether. Mark Anderson, a pundit and head of Strategic News Service, has analyzed the tea leaves, and he’s predicting a recovery is in the offing. There’s scant real evidence for it, as you can see from the chip sales chart from the Semiconductor Industry Association on the right.
He’s just one pundit among many. But let’s tackle the argument he made in his subscription-based newsletter today. First, even though Gartner predicts chip sales will fall 22 percent in 2009, Anderson says such predictions usually focus on the rear view mirror. Echoing Intel chief executive Paul Otellini, Anderson thinks the chip industry hit bottom in the first quarter. Both sales in dollars and units ought to improve throughout the year. That’s a bold prediction, given the stock market weakness in the past days. Chip stocks aren’t as bad as they used to be, as the Philadelphia Semiconductor Stock Exchange chip index shows on the lower chart.
Anderson thinks that both PC sales and cellphone sales will accelerate and wind up in positive growth compared to a year ago. He thinks that Obama, Geithner et. al. gave the economy the right medicine to head off the deepening of a global recession. While the rest of the economy lags, the tech economy is on its way up, he says.
He also believes that China’s stimulus package has prevented more damage in Asia. Despite setbacks in Thailand and Vietnam, Asian growth is back, including an 11.9 percent growth in Asia Pacific chip sales. There are more kinds of gadgets, from iPhones to navigation units, being sold than ever before. Gadgets per capita is going up.
He also notes there are more consumers. About two billion people are on the path to moving out of poverty levels of $1 per day in income. They’re an emerging consumer class, and they will consume a lot of chips. Lastly, he says Windows 7 will outsell all expectations and become Microsoft’s best-selling product ever. The operating system goes on sale on Oct. 24 and should release pent-up demand from many PC owners who have been waiting to buy a non-Vista machine. (He doesn’t note that Apple has a new operating system debuting in September).
Is he out of his mind? Take our poll and offer your own thoughts in the comments.
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