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Pure-play foundry market to decline in 2005, says iSuppli

Posted: 04 May 2005 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor? pc? mobilephone?

Due to weak demand and a slowdown in semiconductor manufacturing outsourcing, pure-play foundry revenue declined by 15 percent in the first quarter of 2005 compared to the fourth quarter of 2004. As a result the pure-play semiconductor foundry market is expected to suffer a decline in revenue for the whole of 2005 - which would make 2005 the first year that overall chip business growth exceeds that of the foundry market, according to iSuppli Corp.

Pure-play foundry revenue in 2005 is set to decline by 6.2 percent compared to 2004 to $15.90 billion from $16.95 billion, while the overall semiconductor market rises 6.1 percent, with revenue up to $241.1 billion, up from $227.2 billion in 2004, the market research company said Monday (May 2).

The El Segundo, California-based company predicts that pure-play foundry revenue will return to strong growth in 2006 through 2009 with revenues of $18.35 billion, $22.02 billion, $26.43 billion and $33.00 billion in 2006, 2007, 2008 and 2009 respectively. This would equate to annual growth of 15.4 percent, 20.0 percent, 20.0 percent and 24.9 percent in those years, respectively.

In recent years the foundry business has expanded at a significantly faster rate than the semiconductor market as a whole, according to Len Jelinek, director and principal analyst, semiconductor manufacturing, with iSuppli Corp. For example, pure-play foundry revenue rose by 35.5 percent in 2004, compared to a 24 percent expansion for the overall semiconductor industry. Semiconductor industry growth has never exceeded that of the pure-play foundry business, according to iSuppli research.

The pure-play foundry industry is being impacted by generally slower growth in the worldwide electronics business, iSuppli said. After posting 11.1 percent growth in 2004, revenue expansion for finished electronic products is expected to slow to 6.4 percent in 2005. The deceleration in electronic equipment revenue expansion in 2005 will be due to substantially slower sales growth for PCs and mobile phones.

- Peter Clarke

EE Times

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