“Enjoy the Super-Cycle,” urged Penn, “if It lasts through 2022 it will crash in 2023. Capex expansion bragging rights are now out of control (Especially Intel, plus Samsung, SK-Hynix & TSMC all talking telephone numbers.”
Penn estimates last year’s expansion at 26% for a market worth $553 billion is forecasting 10% for this year with the market reaching $609 billion though, he warns, that it could turn out negative.
Downside risks to the current buoyancy are:
Most logic Is now both out-sourced and single-sourced;
Advanced IC capacity is now in the hands of a few (“err, one – don’t rely on Samsung or Intel to bail you out”.)
On-shoring is potentially the biggest post-crash recovery risk (‘Yesterday’s product tomorrow’);
There are way too many mature node factories in prospect.
A third year of growth is dangerous.
At the moment growth is hampered by shortages, inflation looms, China GDP growth falters, double ordering and inventory build muddy the market, unit shipments are well above the 8% trend line, capacity is sold out and the H121 capex was too low to balance demand.
On the upside the more robust H221 capex will start to take effect in H222, the ASP recovery is in full flow and H221 long term supply agreements were up 10% on H220.