Public discussion on the economic downturn has spawned its own set of buzzwords. My favorite is "real economy." For me that means the productive part of the economy, not the one that's driven by playing on the stock market.

While there is still little visibility into how the New Year will treat us, it is generally accepted that the technology sector is relatively cash-rich to the point that most contributors to the "real economy" will survive through the scarcity of credit.

China's regular double-digit annual growth in semiconductor sales revenue will however be interrupted as it experiences just 6.7 percent growth this year, according to iSuppli Corp. The Chinese New Year may not bring as much joy in 2009 as sales are expected to be slower. That could impact the entire supply chain. And since this supply chain is more prominent in Taiwan, the impact will be more visible on the island.

UMC has already disclosed that their capacity utilization this quarter will be 55 percent. For TSMC, capacity utilization during the same period is expected to be below 70 percent.

South Korea, while unchallenged in the memory sector, remains weak in the more complex silicon systems area. And the memory market is not exactly a rapidly growing segment these days. The chaebols take the lion's share of complex systems and that share could only increase during times that will be tougher on smaller companies.

Growth areas
Despite the gloom, some segments are expected to grow. iSuppli expects China's fabless IC industry to grow by 12.3 percent to reach $3.5 billion in 2008, up from $3.1 billion in 2007. Next year, that figure could reach $4.1 billion, up nearly 17 percent. Companies also expect the flat-panel display market to continue growth on the back of high local demand.

For Taiwan, the mini- or ultra-mobile PC segment is expected to perform well. The Market Intelligence Center sees doubling of sales next year.

In South Korea, their government earlier announced support for communication, imaging and DTV, automotive and health care industries, and certain types of IC design.

Some trends in India appear contrary to what a global economic slowdown would suggest. The country's GSM players recorded the largest ever subscriber addition at nearly 8 million in October. There are now 242 million GSM service subscribers. And iSuppli expects India's mobile handset demand to grow by 23.9 percent to reach 136 million units in 2009. The firm expects 2008 to register 16.8 percent growth.

Another possible growth area is alternative energy. iSuppli sees an upcoming oversupply of polysilicon for photovoltaic cell manufacturing, resulting in lower prices for the raw material.

While the impact of the financial disaster on all industries is undeniable, its severity is debatable. EE Times-Asia hopes engineering productivity will bring much needed help to Asia and elsewhere. Best wishes to all.

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