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SIA lowers chip forecast for 2009

Posted: 20 Nov 2006 ?? ?Print Version ?Bookmark and Share

Keywords:SIA? chip sales? DSP? DRAM? WSTS?

The new forecast projects that sales will reach $248.8 billion in 2006, an increase of 9.4 percent, followed by increases of 10 percent to $273.8 billion in 2007, 10.8 percent to $303.4 billion in 2008, and 5.8 percent to $321 billion in 2009, according to the Semiconductor Industry Association (SIA).

The forecast projects a compound annual growth rate of 9 percent for the forecast period, 2006-2009. Total worldwide microchip sales in 2005 amounted to $227.5 billion.

The association cut its forecast for 2006, 2007 and 2008, but raised it for 2009. In June, the SIA revised projected worldwide sales of chips for 2006, and suggested growth of 9.8 percent to $249 billion, up from its previous estimate of 7.9 percent growth to $245 billion. The SIA said the correction is mainly due to better than anticipated demand for chips by the mobile phone sector.

The previously revised forecast also includes more optimistic projections for industry sales from 2006 through 2009. The SIA previously said the semiconductor industry will grow by 11.0 percent in 2007, 12.0 percent in 2008, and 4.0 percent in 2009.

In June, the forecast projected an average compound annual growth rate of 9.2 percent from 2005 through 2009.

In another sign that the IC business is slowing and maturing, the World Semiconductor Trade Statistics (WSTS) group in October also reduced its semiconductor forecast for 2006, 2007 and 2008. The global semiconductor market is expected to grow by 8.5 percent to $247 billion in 2006, according to the autumn forecast of the WSTS. Projected growth in the worldwide semiconductor market will moderately increase to 8.6 percent in 2007 and culminate with 12.1 percent in 2008, according to the group.

Despite the lowered forecast, the SIA is still bullish. ''Consumer purchases of a broad range of electronic products continue to grow as the leading driver of demand for semiconductors,'' said SIA President George Scalise, in a statement.

''Traditional consumer electronics products, such as digital cameras, digital televisions, and MP3 player players now account for nearly 20 percent of all semiconductor consumption,'' he said. ''The newest, most advanced consumer electronics products tend to have high semiconductor content. Consumers are also the principal buyers of cell phones which drive another 20 percent of semiconductor sales. When consumer purchases of automobiles, personal computers, and other electronic products are taken into consideration, consumers account for more than half of all semiconductor consumption.''

Hot, cold markets
Unit sales of cell phones are expected to increase by more than 20 percent in 2006 to more than 1 billion units. With an average semiconductor content of $41 per unit, the cell phone market is now the second-largest consumer of semiconductors, after personal computers, according to the SIA.

Other growing product segments include digital cameras with projected 11 percent unit growth, MP3 players with projected 35 percent unit growth, digital televisions with projected 56 percent unit growth, and personal computers with projected 10 percent unit growth, the trade group said.

''DRAM sales are projected to be the fastest-growing segment with a compound annual growth rate of more than 14 percent in 2006-2009. DRAM sales are expected to be especially strong for the remainder of 2006 and in 2007 as PC makers add memory to accommodate the Windows Vista operating system,'' according to the group.

''Digital signal processors (DSP) are the second-fastest growing market segment, with sales projected to grow at a 13 percent compound annual rate through 2009. DSP sales are driven by continuing strength in the cell phone market and new consumer applications, such as high-definition camcorders,'' the SIA said.

- Mark LaPedus
EE Times




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