Coronavirus is regarded as the black swan of IC market in 2020

28 August 2023

IC Insights believes that the spread of the coronavirus and its negative impact on the global economy and IC markets fit the definition of the "black swan incident".

"Black Swan" is a phrase commonly used in the financial world to describe an unexpected and unknown event. More than a decade ago, General Electric's then chief executive Jeff Immelt coined the term "reset economy." He used this phrase to describe what he expected the world after the 2008-2009 financial crisis and the ensuing global economic crisis to be a very different world.

This "reset" concept can be applied to this year's global IC industry following current global trade and business disruptions and the expected global economic slowdown due to a coronavirus outbreak.

After experiencing a sharp decline in the market in 2019, most people believe that the integrated circuit industry will usher in a fairly strong recovery in 2020. In fact, global IC sales in January 2020 increased by 79% year-on-year. IC Insights initially predicted that the IC market will grow by 8% in 2020.

However, since most of the industry is located in the Asia-Pacific region-probably the region most affected by the virus-the integrated circuit industry is now severely affected by the epidemic. IC Insights intends to take a step back and re-examine its forecasts for the IC market.

IC Insights believes that the virus is a short-term event that will lead to a fast v-shaped recovery, or it is more likely to be a u-shaped recovery-that is, a seasonal average of several quarters of growth before a stronger recovery stands. Another situation is that the integrated circuit market prospect is l-type.