Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Memory/Storage
?
?
Memory/Storage??

Memory overcapacity to slow semi growth next year, warns Gartner

Posted: 29 Mar 2005 ?? ?Print Version ?Bookmark and Share

Keywords:memory? semiconductor? dram? nand?

In a sign the electronics industry may be in for more rough sledding, market research firm Gartner said in an analysts' meeting here Wednesday (March 23) that growth in the semiconductor market will slow down to 2.1 percent in 2006 from a projected 3.6 percent this year.

According to Gartner, the industry's Achilles heel will be a drastic decrease in the growth of memory, expected to fall 13.8 percent in 2006 compared to 2.9 percent in 2005.

"NAND flash overapacity will drive the market down next year," said Jeremey Donovan, vice president for Gartner's worldwide semiconductor group, to analysts.

That scenario could throw a monkey wrench into an industry where NAND flash has been one of the bright spots over the past year, thanks to booming demand for NAND flash in USB flash drives and flash cards for digital consumer applications.

"The commodity memory business " dominated by DRAM and NAND flash-- was the one device sector immune from soft supply conditions in 2004," said Donovan. "Wireless and digital consumer electronics were star performers once again."

Other analysts have expected NAND flash to remain in tight supply and be a growth market the next two years.

But as suppliers have ramped up production of NAND flash, prices have fallen and eroded profitability.

Last year, unit growth in NAND flash more than made up for pricing softness, said Donovan.

In 2004, the total global semiconductor industry delivered 23.4 percent growth, with revenue totaling $219.9 billion, according to Gartner's final market share statistics.

Intel remained the No. 1 vendor at leading with $30.7 billion in worldwide semiconductor revenue for the 13th consecutive year. However Intel grew in revenue only 14.2 percent, while number two supplier Samsung, at $16.2 billion, grew 55 percent according to Gartner.

A more detailed story on Gartner's ratings breaks down the top suppliers.

Companies headquartered in the Americas still dominated the market in 2004 at $104 billion but their cumulative growth was only 20 percent, while Asia-Pacific companies, excluding Japan, grew at a hefty 47 percent with relative smaller revenues of $33.5 billion in 2004.

South Korean companies, led by Samsung, had a 10 percent share of the global semiconductor market in 2004, while Chinese companies had only a 0.3 percent share with $727 million.

However, Chinese companies are the fastest growing, having increased revenue 87 percent in 2004 from $388 million in 2003.

As far as capital equipment is concerned, "The industry remains vigilant in adjusting capex to anticipated demand," said James Hines, a principal analyst with Gartner covering semiconductor manufacturing. "You can expect a 13 percent cut next year."

The key drive of semiconductor growth over the next two years will be portable digital audio players, said research analyst Jon Erenson.

"Apple has provided a seamless integration for its iPod and iPod Shuffle by integrating the player, with the iTunes software and iTunes store, and that's going to drive the demand for all kinds of chips for both products and the myriad of iPod wannabes," said Erenson. "We estimate that there will be 50 million iPOds shipped this year, with 30 million being iPod shuffles."

- Nicolas Mokhoff

EE Times

Spencer Chin contributed to this report





Article Comments - Memory overcapacity to slow semi gro...
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top