The current rebound has a decidedly mixed feeling to it, unlike the downturn, which hit like a ton of bricks last year. Things have been bad. This year, the worldwide economy will shrink (-0.8%), going backwards for the first time since 1946 — a 63-year period, according to Bill McClean of IC Insights. Next year, world economic growth will likely get back on track, and IC revenues are expected to reflect that. The Semiconductor Industry Association (SIA) is predicting 10% growth in IC sales next year and 8.5% in 2011. Semico Research is more optimistic, calling for a 20% increase in chip sales next year.

McClean is a self-described optimist, and now is no exception. "We've had four world downturns followed not just by good growth in semiconductor sales, but followed by really boom years," he said. In 1999, chip sales surged 19%, in 2003 by 18%, and next year, McClean predicted, IC sales could jump "by at least 15%, and it could go to 20%."

So why doesn't it feel quite like good times again? Applied Materials Inc. is a case in point. With sales rebounding, they are laying off another 1300–1500 people, 10–12% of staff. Tokyo Electron Ltd. (TEL) also is cautious. In a good year like 2007 or 2008, TEL was a ~$7B–$8B company. This year, it will be about half that. To be sure, the world's No. 2 equipment vendor expects a bounceback next year, but only to ~$4.5B in sales.

The big equipment companies are looking forward to much better times, but not as good as before the downturn started. That has the PC and cell phone system companies worried. They track SEMI's equipment billings as a good indicator of eventual chip surpluses or shortages, McClean said. Now, anxiety levels are rising. In business, getting it right is tough. Having a little slack in the pipeline, obviously, is ideal. Systems companies now fear that too little equipment is being sold by Applied, TEL and others, that too few DRAMs, cell phone chipsets and analog ICs are being made, and that shortages will become widespread.

McClean is predicting shortages. Most companies are getting parts now, though they are worried about the rise in DRAM prices this year, he said. In the first quarter, the seasonal adjustment will occur, and again, companies will get their parts. "Some might think they will be alright, but by the end of 2010, the shortages will be real." Not everyone agrees. Mike Howard, senior DRAM analyst at iSuppli, argued that DRAM companies expanded capacity so much during the 2005–2007 period that DRAMs will be sufficiently available until 2012.

Already, Nokia has said its smart phone sales have been crimped by cell phone parts shortages. Intel CEO Paul Otellini said that if system sales boom next year, the chip industry won't be able to meet demand. Already, Intel can't ship enough desktop chipsets. "The industry is not ready for this yet," Otellini was quoted as saying at an Intel event in mid-November. "One of the things I worry about is, will everybody's capacity be there in sufficient quantities to build it?"

"The big question is," said Wall Street analyst Dan Berenbaum at the same SEMI Austin economic outlook breakfast where McClean spoke, "is the snapback of 2009 sustainable?" Companies are acting cautiously because "there has to be more capital discipline" in the overall semiconductor industry, Berenbaum said. However, he adds that a capex spending war may be underway between TSMC and GlobalFoundries. "With Morris Chang back in as CEO of TSMC, there is no way, no how, that he is going to let GlobalFoundries gain market share."

That may be true, but Chang also is on record as saying he is not going to put leading-edge capacity online unless his customers are willing to quickly move to it. In that sense, everyone is chastened by the last boom. In the United States, the rising government debt load and the reluctance of companies to keep workers employed are conspiring to keep consumer budgets cautious.

Are shortages coming? If shoppers are as cautious as the companies considering whether to invest in new capacity, or not, it is likely chip shortages probably will continue to be moderate and manageable.