Compared to last year, the outlook for the semiconductor industry appears to be dramatically healthier. In fact, the confidence level of our respondents in this year’s survey is quite similar to the level in 2007. However, industry executives continue to show a degree of lingering skepticism on the strength of the recovery. For instance, while our 2009 survey results show marked improvements over 2008 survey results in how semiconductor executives are expecting increased revenue projections, the forecasts for growth in profitability, R&D, and CapEx spending are much less robust and the recovery will not reflect any meaningful additions to the semiconductor workforce in 2010. In summary, while the semiconductor industry is in a far better position entering 2010 then it was a year ago, the trajectory of the recovery is still unclear.
In addition to the business confidence index, we also identified two important trends:
• China a Key to Growth—by an almost two-to-one margin, semiconductor executives identified China as the most important country market for revenue growth in three years, followed by the U.S. and Taiwan.
• High Interest in Energy Efficient, Renewable Products—for the second year in a row, the KPMG study found strong interest in energy efficient or energy renewable technology, with 66 percent of the executives indicating a high or extremely high level of customer interest in energy efficient or energy renewable products.