The Private Sector Is The Strength Of The Economy

An interesting discussion of current and future economic prospects. The panel asks where the growth is going to come from? I think it is going to come from the place it has come from for the last 30 years. Advances in electronic technology.

Some economic prognosticators see a return to normalcy.

This year will experience a negative global GDP (-0.8%), which Bill McClean, president of IC Insights (Scottsdale, Ariz.), said is the worst performance since 1946 in the aftermath of a world war that devastated most of the planet's production centers. "To put things in perspective," he said, "since a global recession is defined as 2.5% growth or less, the situation is pretty bad."

The good news is that things are looking up. "In our forecasts we warned people to think quarterly, not to look at 2009 in total," McClean said. "The world GDP may be negative, but Germany has announced that it is out of the recession. They had growth in the second quarter, as did France and Japan. These countries were not expected to show a positive GDP until 2010. The U.S. will show growth in the 3Q09 GDP."

As a result, semiconductors are experiencing up to a 4% growth this quarter, and McClean said next year we can expect a 3.4% GDP. Meanwhile, the economists' forecasts for 2010 keep creeping upward. "The long-term average is 3.6%, so 3.4% is not that great, but it is a heck of a lot better than -0.8%."

Global recessions are nothing new; they have happened before. However, the current one has been steeper than most. "If we go by the past history of these cycles, after every global recession we have had two great years of semiconductor growth," McClean said. "We are looking at at least a 15% growth next year, probably over 20%. Global recessions are times of pent up demand; they do not crush or eliminate demand for electronic systems. As soon as things look better, companies and people start buying — new PCs, cell phones, new servers, TVs, and other appliances."

There are other signs that electronics is a growth leader.

Call it a power surge. The worldwide digital power IC market -- including controller ICs, converter ICs, and system management ICs -- is expected to grow from more than 5 billion units in 2009 to 12.3 billion units in 2014, a CAGR (compound annual growth rate) of 19.8%, according a report released recently by the Darnell Group.

The research house said the surge of growth will be spread out over a diverse market of power supplies, including external ac-dc and embedded ac-dc power supplies, dc-dc modules, embedded dc-dc converters, telecom rectifiers and external dc-dc, lighting ballasts, and inverters.

“Although digital solutions are still primarily being used in high-performance applications, the pervasive emphasis on energy efficiency is pushing digital from high-end-only into the mainstream,” Linnea Brush, senior analyst at Darnell Group, said in a statement. “Digital control is now implemented in just about all application segments, from catalog power supplies to power supplies used in medical, solid-state lighting, and consumer devices."

Translation into layman's terms: microprocessors are going into power supplies to reduce power loss and increase reliability. If the price is right, that sounds like a win all around.

And don't forget one of the biggest power management problem around. Managing the batteries and motor controllers for electric and hybrid vehicles. That is only just starting to ramp up.