Based upon data through May it appears that the current world semiconductor business cycle has bottomed. May’s 3-month (3/12) chip shipment growth of +2.4% was the lowest since mid-2005, but thanks to the ongoing SE Asian expansion it never entered negative territory. Global electronic equipment growth varies substantially by region. It is still greater than +25% for a broad composite of Taiwan-listed OEMs – often with significant production in China. By comparison U.S. electronic equipment shipment growth is at ‘break even’ while Japan and Europe are contracting.

Although 2007 is a ‘slow growth’ year, it is not a disaster. Second quarter personal computer sales were stronger than expected – up 12.5% globally compared to 2Q’06. And semiconductor capital equipment is expected to eke out a small revenue increase this year followed by further improvements in 2008-10.

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This column appeared in Global SMT & Packaging 7.8, August 2007.